15/03/2007 - Demand for executives in Australia hit record highs at the beginning of 2007, with businesses set for another 12 months of growth.

Managing director of EL Consult Grant Montgomery said the market was looking for new talent at the end of last year and business was powering into 2007.

Last month, the EL executive demand index rose to 1070 points, 15 per cent higher compared to January. This was 180 points higher than in February 2006.

"Most importantly is that rising demand for executives is a pre-cursor of further overall improvements in unemployment," Montgomery said.

Unemployment is already at a 30-plus year low, and with further demand likely to worry the Reserve Bank of Australia about the tight labour market and demand-drive inflation.

"As skills become harder to find, the natural result will be a push on wage levels," Montgomery said.

"This is in fact already occurring in some areas and will prompt the Reserve Bank to try to slow activity with higher interest rates."

However, all 17 economists reporters surveyed at the beginning March said rates were on hold at 6.25 per cent for the forseeable future, despite some upward pressures on wages growth.

The EL index showed increased demand for marketing, finance and management executives in the government and private sectors.

In February, marketing was the best performing sector, rising 41 per cent compared with the previous month.

"Of particular note is the huge increase in government demand for marketing executives," Montgomery said.

"Governments have come alive with marketing, well aware that it is not just delivering a service but letting voters know they are doing a good job as well."

Engineering and information technology sectors fell due to significant reductions in print-based ads, while web-based advertising bounced back after a poor January result.

Across the states, New South Wales was strongest followed by Victoria and the ACT.

But Tasmania the Northern Territory and South Australia fell.

Among the sectors, financial index rose 30 per cent compared with the previous month as the Christmas holiday period came to a halt and companies embarked on new hiring programs.

Elsewhere, engineering index could not sustain previous gains and fell eight per cent in the month.

Although volatile, the engineering index has been positive since August 2005 due to the engineering skills required in resource projects and public infrastructure.