Long-term unemployment among IT contractors has fallen by a third in the last six months, according to a new survey by contractor services company Giant.

The research suggests that only 6.8 per cent of IT contractors have currently been without work for a long time, compared to a figure of 10.1 per cent half a year ago.

In addition, business investment in projects requiring IT contractors was up by 9.2 per cent in the last quarter of 2009, compared to the previous three months.

Matthew Brown, managing director of Giant, says this data indicates how much was cut away from IT budgets during the recession, as well as how robust the market is to bounce back.

"IT directors are still wary about increasing headcounts, so contractors offer a relatively low-risk way of increasing capacity without incurring additional employment-related costs as demand recovers," he added.

According to the Recruitment & Employment Confederation, the role of IT contractors will be critical in helping the government pull the country out of recession.