The demand for contractors increased during February, according to the latest Report on Jobs published by the Recruitment and Employment Confederation (REC) and KPMG.

Temporary jobs saw the greatest increase in demand since May 2007, with permanent placements rising at the sharpest rate in ten months.

Growth of availability of contractors was also much stronger than that of permanent workers and temporary staff's hourly pay was also seen to increase modestly.

Kevin Green, the REC's chief executive, commented: "The scandal within the UK jobs market is that nearly one million young people - over 20 per cent of 16 to 24 year olds - are not in work or education. Young people seem to be excluded from the growing number of vacancies as employers remain conservative, favouring experience over potential."

These findings are supported by the Monster Employment Index for February, which showed that contracting demand across sectors such as construction, engineering and IT grew.