IT contractor rates have increased by 5% since the start of 2004, research has revealed.

Contract rates declined during the second half of 2003, the height of the IT recession.

But research by iProfiles, the online CV company, commissioned by the Association of Technology Staffing Companies (ATSCo), showed rates have recovered.

Median hourly rates dipped to £36 per hour during 2003, but rose again to £38 per hour in Q3 2004.

But the permanent market has been more stagnant and has retained a median annual salary of £33,000 per year since Q3 2003.

The proportion of IT professionals out of work is also continuing to decrease, with the percentage of respondents reporting they are not working dropping from 16% in Q1 2004 to 10% in Q3.