PERMANENT technology roles have slumped 20 per cent since February, but contracting vacancies have held steady, according to the country`s largest IT&T recruiter.

Peoplebank, which acquired Ambit earlier this year, has also reported that the Victorian and Queensland IT job markets have softened in the past few months, while NSW and ACT have turned in patchy performances.

The news comes as the ANZ monthly job ad index, a measure of the overall employment market, showed that job ads in metropolitan newspapers and on the internet fell by 4.9 per cent, the biggest drop in seven years.

Peoplebank chief operating officer Peter Acheson said Western Australia`s IT recruitment market had just had a record month, while South Australia continued to perform well.

"We are not seeing any reduction in contracting volumes, it is only on the permanent side," Mr Acheson said. He said salaries were likely to remain flat after consistent rises in recent years.

"There is nobody paying out the big salary increases right now," he said.

According to the Olivier Job Index, IT vacancies in NSW were down 9.5 per cent, seasonally adjusted, in August.

In Victoria, technology roles fell 5.4 per cent and in the ACT they dipped 4.7 per cent. Queensland IT vacancies dropped 11.6 per cent and Western Australia slipped just 1.1 per cent.

Olivier Group director Robert Olivier said the usual hiring boom at the start of a new financial year had failed to eventuate. "The big hurt is on the permanent side rather than contracting," Mr Olivier said.

"Obviously, the IT vendors and consultants have been in fairly serious retreat."

The Olivier Job Index found the IT sector tumbled 8.28 per cent, seasonally adjusted, in August. The overall national market recorded a fall of 3.54 per cent, seasonally adjusted, for the month. There was an average of 32,264 IT vacancies on commercial job sites last month as opposed to 35,177 roles in July - a difference of 2913.

In the past three months, IT positions vacant have slumped 17.10 per cent, making it the worst performer from the 16 sectors surveyed. On a 12-month basis, technology roles fell 14.81 per cent. "What we have seen is, the rest of the economy has caught up with the banking sector, making the downturn more widespread now," Mr Olivier said.

Software development and engineering roles were down 11 per cent in August, while management and sales vacancies slipped 5.9 per cent. Networks, communication and security jobs were up 0.7 per cent. Internet, graphics and multimedia roles dipped 2.7 per cent in August.

The research showed IT graduate positions have dropped 21 per cent in the past 12-months.

"Although IT graduate numbers are down, I wouldn`t fear for their job security just yet given the shortage in the market," Mr Olivier said.