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UK contractor market looking up ahead of Autumn Statement

Contractors Have Cause for Cautious Optimism in November

We recently took a look at the state of the contracting market in October and found a mixed picture – the overall fundamentals of the economy were relatively strong, but some regions and industries were in a better shape than others and the future looked uncertain.

 

The market for contractors is unlikely to change significantly overnight, but ahead of the Autumn Statement and clarification on IR35, November began with some positive news.

 

The new Markit/REC Report on Jobs, published last week, shows that the number of contractors placed in temporary roles rose at a faster pace in October, with the rate of growth accelerating to a five-month high, while the number of people placed in permanent roles also increased for the third month running.

 

This increase in appointments was supported by growth in the number of vacancies, the research found, with demand for both contractors and permanent staff the highest since May.

 

There was also an increase in salaries, although this increase was greater for permanent staff than contractors.

 

While the REC chief executive, Kevin Green, believes the findings suggest the UK economy is in a “great place” he also warns that there are threats to the market and in sectors including engineering, construction and healthcare, where there are “more vacancies than people”.

 

However, presuming this difficulty in recruiting talent in the UK doesn’t prompt businesses to relocate abroad, such a situation could prove positive for contractors, who should be able to find new roles easily and could be in a strong position to negotiate their rates upwards.

 

This good news was echoed in a report on Contractor UK that showed demand for IT contractors had reached its highest point since March. It should be noted, however, that this came hot on the heels of a Computer Weekly blog warning of a clampdown on IT contractors, referring to the reforms to IR35 and the hundreds of contractors recently let go by the Department for Work and Pensions (DWP).

 

These contrasting stories arriving in quick succession reflects the mixed picture of the situation for contractors going into November, with the Autumn Statement coming up and the reforms to IR35 being clarified. There’s plenty of cause for cautious optimism, but it’s important to keep a close eye on how the situation develops.

 

Here at Contracting Scout, we’ll be monitoring the Autumn Statement and explaining what it might mean for you, including how the reforms to IR35 finally take shape.

 

And, we’re also on hand to give you advice on how to make the most of the improving market, so if you have any questions or concerns, do get in touch.