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By Joey Gardiner, 7 November 2000 16:45

NEWS The report indicates a general slowdown over the next two years across the whole IT services sector. In its annual survey of recruitment, Richard Holway found the market was due to grow by only 7 per cent in 2000, compared to growth rates of 25 to 30 per cent over the last few years. The report finds that the number of advertised IT jobs this year will be the lowest for five years. Anthony Miller, analyst at Richard Holway, said the industry was suffering because of a much more acute lockdown in IT spending post-Y2K than had been anticipated. He said the figures are important because IT recruitment is an accurate barometer for the rest of the IT services industry. "It tends to feel growth earlier, and feel pain earlier, and more acutely, than the rest of the IT services market." However, he denied the results demonstrate that the skills shortage is abating, saying: "There is still a shortage of skills, but it is in pockets - it is the industry's job to track the changes." Miller's views were backed by members of the recruitment industry, at a meeting of the Association of Technology Staffing Companies (ATSCO), who agreed recruiters are facing rough times. For many, the problem lies in a large shift away from contractors to permanent staff. Nick Ellwood, business development manager at recruitment firm Abraxas, said: "Because of the millennium bug problem the number of contractors in the industry was artificially high, and more and more staff got drawn into the sector. Since Y2K work has dried up, many have moved into permanent employment, presenting recruiters with new problems." The Holway report predicts there will be a large amount of consolidation amongst recruitment companies and that the market will not significantly begin to pick up again until 2002.