We have recently been criticised for not recognising the trends indicated by job ad surveys. Well, we have taken heed and can state unequivocally that the latest such survey indicates that demand for high-end IT jobs in Australia has plunged into the toilet bowl.

The survey we refer to is the E.L Consult Executive Demand Index, which surveys the internet and print job ads for five industry sectors – IT, Finance, Management, Marketing and Engineering – and then applies some fancy maths to produce a number or index for each sector. Taken by itself the number for each sector is pretty meaningless. However, when compared against the number for the previous month, or the same month one year ago, or against the number of another sector, you can get an idea of how jobs demand in a sector is trending and how demand in a particular sector compares with demand in another sector.

What is significant about the Executive Demand Index for July 2005 is that it shows that demand for high level jobs in every industry sector is up significantly on demand in July 2004 – except in the IT sector. In fact, according to the E.L Consult report, IT sector jobs demand is down nearly 20% on 12 months ago and has dropped 9% in the past month.

When compared to other industry sectors, demand for high level IT positions such as CIO, MIS manager, network manager, systems architect and so on, sits at the bottom of the ladder. On a normalised scale, where a higher number equates to higher demand, the IT demand index is 257, the engineering index is 702, the management index is 732, the marketing index is 813 and the finance index is 1215. To provide an indication of how far IT jobs demand has fallen, the principal of E.L Consult, Grant Montgomery, tells during the period from the mid-1990s to 2000, the IT index was by far the biggest and sat around the 1500 mark. So IT jobs demand at the high-end is currently about one-sixth of what it was at its height.

According to Montgomery, the latest E.L Consult figures do not bode well for the IT sector as far as jobs are concerned, given that the rest of the jobs market is booming. "Most people thought that IT would bounce back but it's starting to look that the industry has evolved to the point where IT as a role has been swallowed up by other roles in finance and engineering, Specialised IT roles are disappearing," he says. "Offshoring is one explanation but, with packaged solutions, it's also the case that a company can spend $100,000 on some software, $60,000 on some hardware and the financial controller can get it all running."

This brutally frank report and assessment from its producer stands in stark contrast to a number of upbeat reports about the IT jobs scene from a number of representatives of the IT recruitment industry. Regardless of what some try to tell us, demand for high-end executive positions is almost always a leading indicator of what is to come at the middle and lower-end of the jobs market. If we are to believe what we are being told in this report, IT professionals may well be keeping the champagne on the ice for some time to come. Then again, it is only a survey of ads.