THE Association of Graduate Recruiters' Graduate Recruitment Survey predicts that employers will hire 7.9 per cent more graduates this year than in 2002. This is in contrast to the 6.5 per cent drop last year.

The biggest growth in graduate recruitment is in telecommunications (up 61 per cent), IT companies (up 59 per cent) and consulting, business services and commercial and retail banking (up 36 per cent).

The largest drops in vacancies are in media (down 42 per cent), motor manufacturers (down 19.5 per cent) and chemical and pharmaceutical companies (down 13 per cent).

Although graduate recruitment in London is set to remain virtually static, this area still accounts for the largest proportion of expected vacancies in 2003 - nearly half are likely to be in or around the capital.

The survey indicates that graduate starting salaries are continuing to rise, with an anticipated average starting salary of £20,000, £500 higher than in 2002.

In the context of the government's plans to introduce higher tuition fees for university students, the results are a timely reminder that graduate salaries continue to outstrip all other routes into employment.

The national average annual income is £17,000.

Salaries for new graduates are set to rise in all parts of the United Kingdom in 2003 except London.

Strongest salary growth is expected in the Midlands (up eight per cent) and East Anglia and the south-east (up 6.7 per cent), while the weakest is in the south-west (two per cent).

Carl Gilleard, chief executive of AGR, says: "These results show that the graduate recruitment market is beginning to strengthen again after a year of uncertainty.

"Employers are understandably cautious about returning to the high vacancy levels we saw two to three years ago and the modest salary increases predicted by the survey for 2003 show that recruiters no longer feel the need to pay the ever-escalating salaries of recent years."