Graduate starting salary hits £20,000 as vacancies rise

Employment prospects for Britain's graduates will be far brighter this year than 12 months ago, with the average starting salary reaching £20,000 for the first time, a survey suggests today.

More than 200 leading recruiters are estimating an 8 per cent rise in the number of graduate vacancies. The rosy picture follows a 6.5 per cent drop in recruitment last year and comes despite gloomy forecasts for the economy because of fears of war with Iraq.

Vacancies in information technology (IT) and telecommunications are expected to rise the most – with media jobs falling furthest (42.6 per cent).

Carl Gilleard, chief executive of the Association of Graduate Recruiters, which did the survey, said: "These results show that the graduate recruitment market is beginning to strengthen again after a year of uncertainty in 2002. Employers are understandably cautious about returning to the high vacancy levels. Nevertheless, the survey findings will offer succour to Charles Clarke, the Secretary of State for Education, in justifying the proposed increases in students' contributions to the getting of a degree."

Mr Gilleard added: "We'd seen a fall last year, which was probably higher in the end than our members predicted. I think there is some catching up going on.But a graduate would be foolish in the extreme to think they could just walk into a job. Employers will be selecting and insisting on strong applications."

The report shows a majority of graduates will start paying back loans on fees as soon as they start earning. Ministers have said the starting point for paying back is £15,000 a year.

The biggest growth area predicted is in telecommunications (up 61.3 per cent), IT companies (59.1 per cent), consulting and business service firms (36.4 per cent) and commercial and retail banking (36.1 per cent).

Apart from media companies, vacancies in motor manufacturers are down 19.5 per cent and in chemical or pharmaceutical companies by 13.2 per cent.

Employment prospects in London are up just 1 per cent. The biggest growth areas are the Midlands (up 18 per cent), East Anglia (17.1 per cent) and Wales (16.5 per cent). Ireland is likely to see vacancies drop by 7.7 per cent.

The average starting salary of £20,000 is a £500 rise on 2002. Graduates entering an investment bank or fund management firm are likely to attract the highest salaries of about £35,000, followed by those in consulting and business services (£28,500), and law (£28,000). The lowest starting salaries are in transport and logistics (£16,000) and media companies (£17,500).