After a couple of years of upheaval and turmoil, the IT employment market can look forward to 2003 with "cautious optimism - if nothing more" - according to IT recruitment firm Elan. Elan's annual survey into the state of the IT employment market also revealed a changing mindset among the UK's contractors, who are having to come to terms with a situation far removed from the heady days of the late nineties. Kate McClorey, director at Elan, said: "Our research shows the employment landscape has changed dramatically over the past 12 months and the contractor arena has been hit especially hard by the downturn in the economy." Certainly, the market for contractors is in a bad way and shows little sign of a major recovery during 2003. Three quarters of all companies interviewed for the Elan survey say they currently employ no contractors. Of the quarter of firms which do, there are none who say they have any vacancies - painting a dismal picture for those still out of work. Simply put, the message to contractors is 'bite the bullet and accept that things won't necessarily be as good as they were pre-recession, pre-IR35'. McClorey said: "Contractors should weather the storm and accept that wages may be lower and conditions harsher than they are used to." Elan's McClorey paints a picture with a faint glimmer of hope. "Although the figures show that the market continues to be quite depressed, with companies still announcing redundancies and reeling from scandals, we do believe the worst is over," she said. One areas which Elan predicts will pick up faster than most is the public sector, which despite a reputation for poor pay and conditions may be contractors' best bet for steady work. She added: "We predict that by 2003 the IT jobs market will begin to grow again - but it will not boom. We are seeing spending levels starting to increase - especially in the public sector." However, this lack of opportunity has caused many contractors to reconsider their position. While two thirds of contractors said they have seen a drop in the amount of work around this year compared to last, the survey revealed that more than half of UK contractors claimed they would now consider permanent work - representing perhaps the most dramatic shift in the minds of once stubborn UK contractors.