iTWire - Downturn in high-end IT jobs market

Downturn in high-end IT jobs market

Stan Beer
Thursday, 19 July 2007 11:57

June registered a slight downturn in available high-end IT positions advertised, according to a new report. Could this mean an end to the IT jobs boom?

The demand for higher paid IT executive positions fell 12% in June compared with the previous month and the softening is likely to continue but any downturn will be mild, according to executive search firm E.L Consult’s Executive Demand Index.

The index measures demand for positions such as CIO, MIS Manager, Network Manager, specialist programmer, software manager, systems architect and business systems analyst, among others.

Grant Montgomery, managing director of the executive search firm E.L Consult which researches and publishes the E.L Executive Demand Index, said:

“While June tends to be a month where year-end accounting and budgeting constraints normally dampen new executive employment rates, the extent and size of this month’s fall suggests there is more to the downturn than usual.”

“There is no doubt that the meteoric rise in the value of the Australian dollar is now starting to impact the competitiveness of our exporters including the powerful mining industry.

“Concerns about a change in government and the effect this will have on the employment landscape in particular is also effecting business confidence and therefore planning for new projects and investment.

“What is particularly interesting is that the demand for executives is a lead indicator of general employment. This suggests, despite the current healthy trend, a downturn in skilled and unskilled jobs could occur as soon as the last quarter of the 2007 year.

"Other factors behind this month’s fall in executive positions are the ending of the government's superannuation offer which will slow the volume of investment in the equity market which has buoyed share prices for some time.

"Credit growth is slowing and with the high levels of household debt even a slight change in the business environment would have a significant effect on individual budgets and hence aggregate demand.

“Internationally, the world’s largest economy is slowing as a number of structural problems evident particularly in areas like the U.S secondary mortgage market.

"However, despite these factors, the very healthy state of the Australian economy and the skill shortage is likely to mean any general downturn is likely to be mild."

Despite the overall fall in IT high-end jobs demand, two of the largest states - New South Wales and Queensland - actually recorded rises in demand, and the overall trend remains on an upward trajectory, with demand in June 2007 35% up on demand in June 2006.

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