Results of a recent survey commissioned by APSCo show that demand for contractors, including those working through umbrella companies, has decreased by 13% over the last year.
Placements for IT contractors dropped by 27% in the past 12 months whilst contractors in banking and insurance fared even worse; seeing opportunities fall by 34%.
However, the construction sector bucked the downward trend and registered a 33% rise in demand for contractors. Engineering and manufacturing industries also increased their contractor usage by 15% over the 12-month period.
The study also showed a slight decrease in the percentage of the overall workforce employed as temps or umbrella contractors; from 6.4% to 6.1%.
The chief executive of APSCo, Ann Swain, said she hoped the decrease in contractor demand was simply a short-term reaction to the current crisis in the Eurozone. As she pointed out, contractors are usually at the forefront when it comes to headcount reductions, but when confidence returns, businesses turn to them first.
She went on to say that the sheer flexibility of the contractor workforce makes it a hugely valuable asset for the UK economy. During times of crisis, companies will put non-urgent IT projects on ice, but as soon as the outlook improves they will be thawed out and contractors will be back in business.
John Nurthen from Staffing Industry Analysts explained that contractors in the banking sector have seen their rates decrease by up to 15% recently and some banks have told their temporary workers to take a mandatory unpaid festive break.
He added that although contractor demand has dropped in the banking sector as a whole, niche areas like compliance and risk are still showing significant demand.
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