Press releaseFriday 04 April 2008

CONTRACTOR JOBLESSNESS RISES AS FALL-OUT FROM CREDIT CRUNCH BEGINS TO BITE
(Issued by Mattison Public Relations)

• Contractors put faith in public sector

Long-term joblessness among IT contractors has begun to rise, hitting 5.5% this month, after falling to a two-year low of 4.4% at the end of 2007, reveals research by giant group plc, the contractor services provider.

According to giant group, the rise in the percentage of contractors without work for three months or more is likely to be a result of a knee-jerk reaction to the credit crunch as banks freeze non-essential IT spending and put contract renewals on hold.

A long-term joblessness rate of 5.5% is historically still very low, explains giant group.

Matthew Brown, Managing Director, giant group, comments: "The post-9/11 downturn saw IT jobs cut across all areas in the City. While we are seeing a rise in joblessness among IT contractors at the moment, most financial organisations have managed their contractor resource much more efficiently since the last downturn, so IT departments have far less fat to trim than in 2001-02."

"Unlike the dotcom boom there is no sense that the economy is overstaffed with IT workers. They are working pretty much at capacity."

He adds: "In some areas demand for IT skills is actually rising in the City. Risk management and compliance are huge growth areas right now. If anything the credit crisis and the Société Générale scandal will accelerate this process, rather than lead to curbs on spending."

The same research by giant also reveals that the percentage of contractors expecting their earnings to rise has jumped from 71.7% at the end of last year to 73.9% now.

Matthew Brown says: "For contractors in work, the tight supply of skills is still playing a significant role in keeping the pressure on pay, though if joblessness continues to rise, expectations for pay rises are likely to be tempered."

According to giant, contractors are putting much more emphasis on job security now than they did one year ago. When asked to rank the criteria they value most when looking for work, contractors scored job security 64% compared to 59% in the first quarter of 2007.

Matthew Brown says: "Job security is now becoming much more of an issue with economic uncertainty on the rise. Contractors may feel less confident taking on work in volatile areas of the banking sector as a result, but contractors are still some way off being as concerned about job security as they were during the downturn in 2001-02."

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