New graduates are earning £18,330 on average - an increase of 4 per cent on last year, according to figures published yesterday.

New graduates are earning £18,330 on average - an increase of 4 per cent on last year, according to figures published yesterday.

Salaries range from £13,000 in the public sector and insurance to £28,500 in the best-paid jobs in law and banking. In the electronics and electrical industry, where firms are planning to recruit twice as many graduates as last year, starting salaries are up by 6.3 per cent compared with an annual rate of inflation of 3.1 per cent.

The Association of Graduate Recruiters, which published the figures, said the competition for the best and brightest graduates was as fierce as ever and prospects were better than last year for "middle-range" graduates.

Carl Gilleard, the association's chief executive, said: "Last year we had quite a sharp dip in the number of training opportunities for graduates. It seemed to emanate from uncertainty about the economy. That has eased off and companies are trying to catch up on last year. With some employers willing to pay almost £30,000 to their graduate recruits, there is some concern that employers offering salaries at the lower end of the scale are likely to find it increasingly difficult to attract good quality graduates."

Vacancies this year are predicted to rise by 15 per cent and one in 10 firms is planning to double its intake. Thirty per cent expect some increase and 28 per cent a decline.

The lowest starting salaries are in insurance (£16,500) and the public services (£16,650).

There is a wide range of increases among employers. Almost one in six did not report any salary increase this year, although a further one in six offered more than £1,500. Most increased salaries by between £500 and £1,000.

Growing numbers of employers are advertising and placing application forms on the internet. Nearly half receive application forms on the internet and a further third are planning to do so in the future. Ten per cent have dispensed with recruitment brochures completely.

The report says: "Most were confident that the use of online methods was in its infancy and would have considerable downstream benefits. There were some sceptics who felt that on-line methods ... were just hype, trendy, or currently fashionable. However, even these recruiters agreed that they had to offer online access to remain competitive." A recent survey found that 83 per cent of graduates searched for jobs on the internet.

Nearly 80 per cent of the firms and organisations in the survey used assessment centres to pick employees and three-quarters focused on specific universities.

Employers had most difficulty recruiting people in the fields of engineering and IT and computing and least difficulty in personnel work and law.

Firms are getting better at keeping graduates, the report says. "The labour market continues to be relatively buoyant yet, paradoxically, members' retention rates continue to improve, suggesting that employers may be beginning to see the value of improved retention strategies.

"There is considerable evidence that employers are still facing stiff competition for the best new graduates. Yet evidence from these data suggests that this competitive demand has not exerted pressure equally on all members' starting salaries."

However, it suggests, the figures may mask bigger increases in earnings for graduates because they do not include performance pay and share schemes.

The survey was done for the association by the Institute of Employment Studies, which sent questionnaires to more than 400 of its members.