SJD Accountancy

July market report good for contractors

Request Callback

Contractors could be entering an extended Summer of elevated demand for their services, as markets that are traditionally strong consumers of their services begin to pick up. Recovery in general is fragile and government austerity measures have sent confidence plunging in some sectors, but contractors often see an upturn in demand in similar circumstances, as they provide a short-term, low risk solution to increased capacity. So, uncertainty that prevents firms from recruiting employees tends to work in contractors’ favour.

Key findings:

  • The Monster Employment Index bounces back after its fall last month, showing increased demand for contractors across the board.
  • Fortunes in financial services are picking up, according to the CBI/PwC Financial Services Survey, meaning IT contractors can expect improved demand.
  • Services output weakens, but manufacturing and construction stay firm in this month’s Markit/CIPS Purchasing Managers Index.
  • The oil and gas sector continues to recover, leading to greater demand for contractors in engineering, oil & gas, offshore and IT.
  • Manufacturing remains strong, with export and domestic demand fuelling output, according to the EEF/BDO Manufacturing Outlook.

Financial sector boosts job index
The Monster Employment Index shot up 7% in May, following a slight dip in April. Strong performance across the board drove the upswing, with financial services sectors, including banking and accounting, showing above-average performance. This is clearly good news for IT contractors depending on the sector for new contracts and renewals. Year on year, the index was up 19% on May 2009, reflecting an increased demand for workers compared to a year ago, as Monster UK & Ireland MD Julian Acquari explains: “Business investment improved in the first quarter of this year, and we can see increased levels of online job availability compared to this time last year.”

IT was the fourth-best performing sector, after transport, education and legal, with demand for IT workers increasing by 11% on the previous month. Both the engineering and construction sectors also saw demand increase, albeit at a slower pace than IT.

Bullish forecasts predict improved fortunes for financial services
More good news for IT contractors supplying financial services firms, as the Confederation of British Industry and PricewaterhouseCoopers Financial Services Survey shows modest growth in the last quarter, to be followed by a higher activity over the next three months. According to CBI Deputy Director General John Cridland, the upswing in business should impact positively on staffing numbers: “The modest pick-up in activity in the financial services sector in the past three months fell short of expectations. But firms hope that activity will strengthen over the coming quarter and are now planning to expand their staff numbers.”

Further opportunities may arise for contractors as a result of the increased compliance expected in the sector. Compliance and governance are areas of operations that traditionally draw heavily on contractors to set up and maintain the IT systems required to implement and monitor new rules.

Confidence soars in oil & gas sector
The latest Oil & Gas UK Index shows the oil and gas sector has emerged from recession, with Q1 2010 showing the highest confidence levels since the survey began. The drilling and well services subsector is performing particularly well. The index, which measures the confidence of firms operating in the sector, shows that oil & gas, offshore, engineering and IT contractors all stand to benefit from a robust UK oil and gas sector.
Brian Kinkead, Oil & Gas UK’s supply chain director, says: “It is encouraging to see this continuous upward trend in business confidence, which is a clear indicator that our industry is emerging out of the recession with renewed drive, confidence and optimism.”

Manufacturing recovery gathers pace
According to the latest EEF/BDO Manufacturing Outlook, manufacturing output and orders are at their highest level since the survey began in 1995, further reinforcing the good news for contractors working in the sector. Commenting on these findings, Lee Hopley, Chief Economist of the EEF said, “The steadily improving trends in manufacturing look set to continue in the coming months and the upswing is being felt right across industry. The steadily improving trends in manufacturing look set to continue in the coming months and the upswing is being felt right across industry. Manufacturers are pulling in more export orders on the back of a recovering world economy and a better outlook for the domestic market is giving companies some confidence to recruit again.”

If you enjoyed this story then visit our Contractor News page for all other news. To discuss this story further visit our SJD Accountancy Blog.

Request a Call Back

We want you to know exactly how our service works and why we need your details. Please read our Privacy Policy before you continue.