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2006 to be 'best year since the boom' for contractors

Dan Ilet silicon.com

Published: 06 Feb 2006 09:55 GMT

IT contractors could earn more money this year than since the peak of the dot-com boom, research suggests.

A survey carried out by contract service provider Giant group indicates that contractor unemployment is at a record low as work in the telecoms sector is picking up.

Matthew Brown, managing director of Giant, said: "For the last few years public sector IT spending has been a substitute for subdued spending in the private sector but 2006 is set to be a year of strong growth across the board.

"Post merger integration of IT systems is vital to the success of [merger and acquisition] deals, so there should be opportunities for contractors. Security and compliance requirements should boost IT spending by financial services firms, while resurgent demand for networking technologies should give the telecoms sector a much-needed shot in the arm."

Most (72 percent) of the 2,500 respondents said they expect wages to increase over the year. Two years ago just 54 percent of contractors said their earnings would rise, while 20 percent predicted a fall, compared to only three percent today.

In 2004, 13 percent of contractors spent 90 days unemployed between contracts but now a mere three percent are experiencing difficulty in finding work. More contractors (28 percent) said financial services would present job opportunities, compared to 21 percent who are betting on the public sector.

Although the percentage of contractors working in telecoms has halved in two years, from 21 percent to 12 percent, Giant group said it expects work will increase here over the next 12 months.

Quocirca analyst Clive Longbottom said he was sceptical of a big change in the contracting market.

He told ZDNet UK sister site silicon.com: "I think we have to be careful. Most of the markets have figured out that boom years are followed by bust years. It will be less than the [dot-com boom] and there'll be a requirement for specialised skills — not just technical ones. There won't be this fantastic market for kids leaving college."