The worst could be over for the UK's IT job market with industry watchers claiming that the recent decline has bottomed out and is expected to start growing again next year.

According to the annual Employment Trends Report from IT recruitment outfit Elan there are signs that the IT jobs market could be picking up with more companies looking to sign up contractors next year.

Four in ten companies currently employing contractors are expecting to increase their vacancies over the next year, the report found.

However, any improvement is expected to be patchy. The north is the most positive with three in ten of companies predicting they will have one to five permanent IT jobs available within the next 12 months. Scotland is the most pessimistic for jobs growth.

Says Kate McClorey of Elan: "Although the figures show that the market continues to be quite depressed, with companies still announcing redundancies and reeling from scandals that have affected the economy, we do believe that the worst is finally over.

"We predict that by the end of 2003 the IT jobs market will begin to steadily grow again - but it will not be a boom. However, we are seeing spending levels starting to increase - especially in certain areas such as security and in particular vertical markets - such as the public sector."

She continued: "My advice to IT workers is to weather the storm and for contractors in particular, to accept that wages may be lower and conditions harsher than they are used to. Their best option is to look at the growth areas in IT today and try and match their skills against those needed for these roles so they are ready when the market picks up."

However, the UK IT contractor market is shrinking in the long term as companies look to longer-term solutions to solve their staffing problems. At the same time, more and more contractors are looking for a permanent position to help insulate themselves against chilly economic conditions. ®