The job outlook in the European technology sector is buoyant, but the haemorrhaging of jobs to lower-cost locations looks set to accelerate, a study has found.

The annual IT confidence survey by global PR network Eurocom Worldwide in association with its UK member agency, Six Degrees finds record levels of confidence across the European tech sector, with 63% expecting to increase headcount, compared to 58% last year, and only 4% expect job losses, down from 8% last year.

The vast majority (81%) of respondents believe that their country is losing tech manufacturing jobs to lower-cost centres such as China, India and Eastern Europe, while believe that service jobs are moving as well.

“The study finds a significant increase in confidence levels from an already high base last year,” said Mads Christensen, Eurocom Worldwide network director. Nearly one in three (65%) respondents are more confident about tech sector prospects in 2007, compared with 53% last year. Over 90% expect revenues to increase over the next 12 months, up from 79% last year.

The survey of 217 chief executive, director or vice president-level European executives also found the skills most in demand are software engineers, followed by international sales, project management and domestic salespeople.

Tech sectors that expect to see most growth over the next 12 months are IT security, followed by mobile services, on-demand computing/software-as-a-service, customer relationship management (CRM) and IT outsourcing.

Geographically, the best prospects for tech sector growth are seen in Western Europe (38%) followed by the US (19%); Central & Eastern Europe (17%) and China (10%).