The class of 2009 are likely to be smiling less on graduation day as next year's Edinburgh graduates will enter one of the most challenging job markets in recent history.

Next year’s Edinburgh graduates will enter one of the most challenging job markets in recent history.

As the British economy heads towards recession, some graduate recruitment programmes have been closed while the overall number of jobs available decreases.

Some Edinburgh students have already felt the effects of the crunch. A fourth year French and Philosophy student found in June that his summer internship in a top New York advertising firm had been cancelled. After undergoing a lengthy application and interview process another fourth year Economics student discovered that his internship in the Mergers and Acquisitions Department of Credit Suisse no longer existed since many jobs in the department were being culled.

UK recruitment website www.monster.co.uk’s European Employment Index showed a decline in the amount of vacancies posted on graduate websites and job boards across the country over the last twelve months, with fewer vacancies in the banking, financial and insurance sector. Over the summer recruitment for Human Resources posts reached a two-and-a-half year low.

However, the highest drops were seen in positions directly related to the construction industry, for example in architecture and urban development, giving credence to claims that the troubled UK housing market will result in substantial job losses.

Hugo Sellert, Head of Economic Research at Monster Worldwide, claimed: “the latest Index findings suggest that overall job losses are likely to intensify as the troubled financial and housing industries continue to drag down the wider UK economy”.

Nevertheless, where graduate opportunities are closing up in the private sector, the public sector is picking up the excess with rates of employment growing in defence, the community sector and clerical work. “Government recruitment is largely sticking to pre-determined programmes and is providing some stability to the job market in these shaky times“, commented Sellert.

According to the Index the region worst affected in the UK is Wales, whilst job demand in Scotland fell in September for the sixth consecutive month. The only job market which remains temporarily stable is in Northern Ireland.

Using data from Adcourier, an online job posting system, onlinerecruiting.com has found the number of responses per job advert has increased by over 100 per cent over the last year. At the end of September, vacancies for graduates met an average of 32 applications per advert compared with just 15 over the same period last year.

A survey recently published by recruitment agency reed.co.uk discovered that over 50 per cent of UK graduates’ greatest worry was not being able to find a job in the current economic climate. The study also found that one in four graduates would consider forfeiting between 2.5 per cent and 5.0 per cent of their pay in exchange for guaranteed job security for three years.

The situation is not exclusive to the UK with graduate recruitment in the financial services industry drying up in the US.

There are reports of major American firms simply not attending careers fairs in major Ivy league universities.

Back in Scotland, the large attendance and lack of cancellations at university Careers Fairs in Edinburgh, Glasgow and Strathclyde show that major recruiters are still interested in the UK job market.

Shelagh Green, Acting Head of the Edinburgh University Careers Services, feels that “it is difficult to predict how tight the credit crunch is going to become, or how deep any recession will be; which means predicting impact on the graduate recruitment market is difficult. Any impact is unlikely to be evenly spread; the finance, property and legal sectors seem hardest hit at the moment”.

However, “Many larger multinationals seem to be taking a more balanced view than in the past - when the market dipped in the late eighties and early nineties many of those organisations drastically cut back on graduate recruitment and suffered in the longer term”.

Over the last few years the University of Edinburgh has boasted a good record on immediate employment following graduation, with 89% of students finding employment within six months of graduating. However, the statistics for the class of 2008 will not be available until next year.

Nevertheless, Richard Wainwright, the CBI’s head of education and skills policy, claimed in The Times last week that “Just having a good degree isn’t good enough any more.”