Nearly two-fifths of European IT firms expect to increase recruitment over the next 12 months, according to the annual IT confidence survey by PR network Eurocom Worldwide.

The survey found that 58% of firms surveyed expect to increase jobs with only 8% expecting to decrease headcount.

Software engineers are most in demand, followed by project management specialists and international sales staff.

The Eurocom study predicts a continuing growth of technology manufacturing jobs in low labour cost centres, especially China.

The vast majority of respondents (76%) agreed that Europe and the US are rapidly losing their lead as technology manufacturing centres because of the rise of low cost locations such as China and India.

Just 11% of respondents disagreed with this view. Almost 300 chief executive officer, director or vice-president level executives responded to the survey in 20 European countries.