Retail and insurance lead two-speed IT spending

More IT-based businesses are starting up with greater investment in IT following the slowdown, but demand is lopsided as business sectors increase spending at different rates.

In 2011 there was a 1.9% increase in the number of IT consultancies created, compared to a 9.2% fall between 2008 and 2010. The modest growth reflects a recovery in spending but masks a two-tier recovery.

According to research from employment services provider Giant Group, insurance firms and retailers are increasing spending the most. The previously high-spending banks and public sector – hit hardest during the slowdown – spend at levels below those before the slowdown.

Giant group said insurers and retailers are responsible for much of the demand for IT skills. 

It said insurers have been hiring individuals that blend actuarial and IT skills to support their work on Solvency II projects. Retailers had invested in online platforms, including mobile shopping systems to allows consumers to shop via mobile and tablet devices.

Giant Group recently recorded a 43% increase in the number of IT workers in the telecoms sector as a result of retailers investing in mobile platforms to increase their share of the growing online retail market.

Meanwhile spending in the banking and public sectors is expected to remain low for some time.

Matthew Brown, managing director at Giant Group said:  “It’s still very much a mixed picture, with some sectors investing while in others spending remains subdued. 

"That said, demand for contractors is holding up reasonably well compared to demand for permanent candidates, even in sectors where investment levels are low.”