The latest Longhaus-ITCRA Australian Tech Index has suggested the ICT sector is facing increasing uncertainty as new job advertisements drop, available jobs are filled, and shorter contract roles become more popular.

 

The Index is a composite of eight indicators which together provide a summary of changes in the level of ICT business activity within Australia. The Index draws on information from the Australian Bureau of Statistics, Department of Employment and Workplace Relations (DEEWR), the Australian Stock Exchange and ITCRA’s SkillsMatch data.

 

Peter Carr, Managing Director of Longhaus, said that while the Tech Index has remained at the same level during 2012, a longer-term downwards trend is evident.

 

“The Longhaus-ITCRA Australian Tech Index has fallen each quarter since the beginning of 2011, aside from a minor two point increase in the fourth quarter of 2011. The most significant contributor to this trend has been the fall in DEEWR’s internet vacancy index, which shows a 29 per cent drop in ads for ICT professionals since the beginning of 2011,” said Mr Carr.

 

“This softening has been particularly pronounced for software and applications programmers, and ICT business and systems analysts,” he said.

 

“This comes on the back of strong growth in employed ICT workers, according to data available from the Australian Workplace and Productivity Agency and the Clarius Skills Index.

 

With higher employment overall, the gap between supply and demand has narrowed over a relatively short period of time.”

 

“With falling job demand, low unemployment and employed labour trending at historically high levels, we expect that the number of employed ICT workers will continue to increase. However, many placements will be made as a function of regular turnover, particularly due to the trend towards shorter contract durations that we’ve also seen.”

 

Julie Mills, CEO of ITCRA, said that more organisations were looking to take on workers rather than downsize their workforce in the coming quarter.

 

“Forty-six per cent of organisations plan to significantly or slightly increase the number of permanent or contract ICT staff. While 24 per cent plan to significantly or slightly decrease their contract ICT staff, only 6 per cent are planning to do the same with permanent staff,” said Ms Mills.

 

“In the second quarter of 2012, we saw the number of ICT contractor placements increase. However we also saw a trend towards shorter contract durations of 1-3 months, which we believe may be a strategic move in response to prospective cost cutting,” she said.

 

As part of the Longhaus-ITCRA Australian Tech Index, 50 ICT decision makers from medium-to-large Australian ICT organisations were polled on their forecasts for ICT spending, project approvals, and demand for ICT permanent employees and contractors in the third quarter of 2012.

 

“We found that poll respondents are no less optimistic for the coming quarter than they were over the preceding 12 months, however they predict slightly more turnover of ICT contractors than in previous quarters,” said Mr Carr.

 

“For the remainder of 2012, we expect that ICT economic activity will be sustained by the continuation of initiatives begun in late 2011 and early 2012. We’ll also see continued confidence in the financial and insurance industries, which are significant employers of ICT,” he said.

 

“However, growth will be constrained by low unemployment, decreasing job demand and uncertain employment prospects for contractors.”

 

“In light of shorter contracts and the expected completion of a number of projects, new projects will become increasingly important to maintain existing employment,” added Ms Mills.

 

“However, we do expect that there will be a drop in the number of employed ICT workers, albeit from a relatively