Graduate job market 'slowing'

Firms are set to take on fewer graduates next year

Graduates leaving university this summer are likely to face a tougher job market than last year, according to a new survey.

Fewer graduates are expected to be taken on, and the average salary for a new graduate is expected to rise only slightly, a study by the research group Income Data Services (IDS) found.

IDS questioned 109 major employers from across the UK economy and found that after two years of growth, the graduate intake was expected to drop 1% compared with the number taken on in 2001.

But the IDS warns the drop may eventually be worse than this, as in the past companies have tended to overestimate their demand for graduates.

Falling demand

The slight fall in graduate demand follows a 6.4% increase in recruitment in 2001 on the previous year.

But while overall demand for graduates is set to edge down, there are big variations within different career sectors.

In the struggling manufacturing sector, firms say they will be employing 3.8% fewer graduates, and demand is also set to fall in the public and service sectors

But job opportunities in the financial sector remain extremely good, with finance companies looking to take on 15.8% more graduates this summer.

The IDS warns that the forecast of a 1% drop in recruitment numbers could be on the conservative side.

It says previous forecasts have overstated the eventual outcome, so the "latest prediction of a small fall in demand could be underestimating the full scale of this year's decline".

Pay up, but only just

The survey found the average salary was expected to rise this year by less than 1% to £19,714.

Last year the average starting salary for new graduates was £19,566, a 4.8% increase on 2000's figure.

The IDS also found that the internet was now the most widespread method used by companies to recruit graduates, coming ahead of more traditional methods such as recruitment fairs.

About 75% of companies now use the internet for recruitment, and nearly two-thirds of firms have online application forms.

Many of those firms who do not make full use of the internet at the moment said they were planning to expand their online services in the coming year.