The intrepid PAYE umbrella contractor making a living in the IT skills market will be heartened by a new analysis by giant group plc, which reveals that the UK’s IT consultancy businesses grew in number by 2% in 2011, reversing two years of precipitous decline.

The IT sector “is at last turning a corner,” according to giant group’s MD Matthew Brown. However, he also noted that the growth was “still quite modest” and urged the government to do more to help small businesses grow and generate new jobs.

Brown added that IT depends heavily on investment but that many businesses have responded to the recession by hoarding cash. IT spending has “taken a hit”. With the eurozone crisis starting to stabilise, more organisations are starting to “push the button” on IT projects that had been on ice since the downturn.

He went on:

“IT investment is crucial to boosting productivity. If businesses do not invest in IT, their long-term competitiveness will suffer. Organisations now have a lot of legacy systems in place, which require upgrading. With the economic outlook improving, IT departments should hopefully get the green light to spend.”

Investment in IT is not uniform, however. Insurers and retailers have led the way, with the former seeking hybrid actuarial/IT specialists to handle Solvency II projects and the latter developing new online platforms. Prominent amongst these is mcommerce, which allows customers to do their shopping through tablet devices or mobile phones.

In the public sector and banking, however, IT investment is likely to stay below pre-recession levels for some time to come. Even so, Brown noted, “demand for contractors is holding up reasonably well.”

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