Growth in IT Services Jobs Slows in 2007

The slowing of the overall economy seems to have tempered IT services employment growth. Still, demand for IT services by corporations that rely more heavily than ever on technology helped fuel growth within this sector.

IT services firms employed 1.344 million people last year, up 5.1 percent from 1.278 million in 2006, according to an analysis of Bureau of Labor Statistics employment data. The growth in IT services employment from 2005 to 2006 was 6.9 percent, the biggest gain in six years.

But the category officially tagged by the government as computer systems design and services performed much better than the rest of the economy and remained one of the nation's strongest sectors. To put that strength in perspective, overall job growth for all professional and business services employers grew a modest 1.8 percent in the past year. All nonfarm employment inched forward by a measly 0.9 percent this past year. Figures are unadjusted; December and full-year 2007 totals are preliminary.

In the late 1990s, as companies staffed up to address the year 2000 millennium bug and began to deploy enterprisewide systems, employment in the IT services sector soared, with annual employment gains approaching 18 percent. But after Y2K, the sector saw the bottom fall out, and combined with the dot-com bust, employment fell by nearly 14 percent over the next two years, rebounding in 2004 by 2.9 percent and in 2005 by 4.1 percent.

Though not showing the same muscle as it did a year ago, IT services remains a crucial part of the U.S. economy that's becoming more dependent on information technology month after month and year after year.

Posted by Eric Chabrow on January 4, 2008 10:25 AM