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Job prospects for this year's graduates are poor and the outlook for those qualifying next year could be even bleaker, according to a study out this week.

In its 1995 graduate recruitment survey, the employment research firm, Industrial Relations Services, predicts graduate output next year will rise by 14 per cent but that this will be accompanied by only a 2.4 per cent increase in the number of graduate vacancies. The findings are based on a survey of 191 employers with a combined workforce of one million.

Starting salaries for graduates in 1995 averaged Pounds 13,960, an increase of 3.3 per cent on 1994. The forecast increase for 1996 is 3.2 per cent and, unlike previous years, the better payers are likely to be medium-sized rather than big employers.

One of the key changes highlighted by the study is that small and medium-sized firms have become significant recruiters of graduates, says report author Neil Rankin. Recruitment by the major companies, traditionally the most important influence on graduate vacancies, has become more difficult to forecast. Forty-two per cent of such firms expect to reduce their graduate intake and smaller employers are now assuming greater importance, says IRS.

Actuarial, financial, engineering and electronics vacancies offer the highest average starting rates, with engineering and electronics showing a strong lead over all others.

The IRS, which has been carrying out its graduate survey for the last five years, says that the graduate recruiters seem increasingly less well-disposed towards the students from the new universities. Decreasing proportions of employers over the years consider that the teaching in the former polytechnics has more business relevance while rising numbers of recruiters feel that they produce lower-calibre graduates.