Contractors in the core contracting disciplines of engineering, IT and management continue to experience sustained demand and face broadly positive outlooks. Engineers are benefitting from a renaissance in infrastructure and energy investment. Organisations are increasingly looking to their IT investment and IT contractors as a source of competitive advantage during the ongoing tough economic conditions. Public sector demand was responsible for a third of interim management contractor assignments at the end of 2011, but the impact of the recent limited company contractor ‘witch-hunt’ fuelled by cabinet ministers is yet to be seen.
In this month’s ContractorCalculator Market Report:
- IT overtakes engineering in the online demand league tables during February, reports the Monster Employment Index (MEI)
- Infrastructure investment drives increased engineering contractor demand, according to the APSCo Monthly Trends Report
- Contractors with clients in the manufacturing sector may have cause for cautious optimism, suggest recent EEF/BDO figures
- The latest Interim Management Association (IMA) Market Audit for the fourth quarter of 2011 reveals that a third of interim management contractors work in the public sector
- IT contractors are no longer dominant in PCG membership, according to its latest Membership Survey & Reputation Audit.
IT overtakes engineering as the contracting discipline leading online demand
Online demand for IT contractors has overtaken that for engineers, with each sector increasing by 13% and 7.3% respectively between January 2012 and February 2012, according to the latest Monster Employment Index. Engineering has consistently captured the top spot in the UK and Europe over the last 12 months.
The headline index also increased sharply, by 12.4%, reversing a three-month downward trend. Year-on-year, online demand growth for IT contractors was the highest across all 21 industry sectors at 23%, with engineering in second place and showing 16% growth.
Although clients and employers remain cautious, Monster UK & Ireland Managing Director Julian Acquari says online hiring performance is encouraging: “While the economic outlook remains uncertain, it is encouraging to observe that more than a third of industries across the UK have exhibited annual growth in online recruitment in February.”
Demand for engineering contractors driven by infrastructure investment
Despite losing its top spot to IT in February, demand for engineering contractors continues to grow strongly, buoyed by a surge in infrastructure investment, according to research by the Association of Professional Staffing Companies (APSCo).
The research from the APSCo Monthly Trends Report shows that demand for engineering contractors had increased 7% on a year-on-year basis in January 2012. This follows a corresponding 23% increase in UK infrastructure spending during 2011, to help reach the highest level of infrastructure investment since 1980.
The UK has a long-term shortage of engineering skills
Ann Swain, APSCo
“The UK has a long-term shortage of engineering skills,” explains Ann Swain, APSCo Chief Executive. “With demand so strong, the Government needs to ensure that the UK’s historical underproduction of engineering skills does not impede growth in vital sectors, such as oil & gas and power generation.”
Cautious optimism for contractors in manufacturing
Contractors focusing on the manufacturing sector for clients may have cause for cautious optimism through 2012. The engineering organisation EEF and business advisors BDO are forecasting modest growth in the UK’s manufacturing industry in 2012, and investment and recruitment outlooks are both positive.
The latest EEF/BDO manufacturing survey reports a strong improvement in sentiment which is translating into investment and increased hiring. “The confidence shown in our survey again demonstrates the resilience of manufacturing in the face of a changing global outlook,” explains EEF Chief Economist Lee Hopley. “This is feeding through to a continuing willingness to recruit and invest.”
However, Hopley warns that the market could rapidly turn in response to the ongoing eurozone crisis and the lack of finance available for small manufacturing firms: “The ongoing fragility in UK and European banking systems and economies, and the lack of access to capital for SMEs, continue to present longer term challenges for the sector.”
Public sector contracts account for a third of interim management assignments, but women may be losing out
The public sector accounted for a third of all interim management assignments, and 40% of these were in local government in the final quarter of 2011. This is according to the latest Interim Management Association (IMA) Market Audit Quarter Four 2011, which also reveals that the number of female interim management contractors is at its lowest level, 24%, since the survey began in 2008.
Banking and finance is the largest private sector consumer of interim management contractors’ services, accounting for four in ten assignments. The chemical, pharmaceutical and biotech industries and utilities sector are in second and third place respectively.
A third of interim management contractors are hired to work on ‘special projects’, closely followed by 17% working in finance. Four in ten interims are performing in a programme or project management role, although an increasing number are hired to implement change and transition management projects.
IT contractors no longer the dominant force of PCG’s membership
PCG’s membership appears to be diversifying away from its traditional IT contractor base, as only 45% of those surveyed as part of the latest PCG Membership Survey & Reputation Audit by ComRes in 2011 were IT contractors. This is compared to 55% in 2010.
Over four out of five members were in a contract during the survey period in September 2011. And, whilst 17% of contractors surveyed have been working for the same client for more than two years, possibly putting them inside IR35, nearly one in five works for more than one client.
The flexible workforce’s identity crisis continues, as those working in IT and engineering describe themselves as ‘contractors’, whilst those in management and project management describing themselves as ‘consultants’. Only 28% see themselves as ‘freelancers’.