Average salaries will top �21,000

The Association of Graduate Recruiters (AGR) survey says graduate positions are set to increase by 11.9%, following two years of falling employment levels.

Average graduate starting salaries are predicted to rise by 3.9% to �21,000 in 2004, with banks and accountancy firms boosting pay the most.

However, fewer employers plan to offer initial bonuses to new recruits.

Golden hello

The smallest number of vacancies in 2004 are in the marketing and human resources areas.

At the other end of the scale, firms involved in banking, retailing, accountancy and engineering expect to have the most vacancies in 2004.

The public sector is set to continue its recruitment drive in 2004 and will be boosting pay for new graduates by more than the average.

The number of employers planning to pay a "golden hello" to graduate recruits has fallen from 32% to 25%.

Top-up fees

Overall, AGR suggests that the improvement in graduate job prospects and pay could help the government in its attempts to win the argument on the charging of top-up tuition fees.

"Starting salaries for graduate level jobs are increasing year on year, suggesting that employers remain convinced of the added value that graduates bring to businesses, both public and private," Carl Gilleard, chief executive of the AGR said.

The pick-up in graduate recruitment prospects is a reverse of recent trends.

In 2002 and 2003 firms cut their recruitment by 6.5% and 3.5% respectively.