Job ads in the IT sector dropped 8.8 percent in June, the second weakest performing sector after Financial Services, to bring its overall decline to 1.3 percent over the past year.

The Olivier Job Index, which surveyed over 388,000 vacancies on commercial job sites in June, also found that graduate job ads in IT fell 9 percent in June.

Director of the Olivier Group, Robert Olivier, said the IT sector was performing surprisingly poor in light of the skills shortage.

"It's never quite clear why IT should be down like that; it's not affected by the price of petrol and it's not the one with the strongest corollary to interest rate rises," he said.

The Job Index found fewer jobs advertised in 14 of the 16 sectors surveyed, with Transport suffering the biggest dip (8.8 percent) due to rising fuel costs. Hospitality, Tourism and Travel fell 4.9 percent, largely due to the high Australian dollar.

In the IT sector, job ads in NSW dropped 8.44 percent, Victoria shed 9.11 percent and WA also moved into negative territory.

"It's been weak all of the financial year," Olivier said.

"Software development is down 6.8 percent for the month, and 2 percent for the year. That represents a third of all job ads in IT so whatever is happening there is a sort of catalyst for much of what else is happening."

"[IT] Management and Sales is down 3.6 percent for the month, and 4 percent for the year. 20 percent of ads are in that sector so I think we are seeing a lot more pain in hardware, retail sales, and corporate sales are coming off a bit as well as organisations look at their capital expenditure."

Advertising and Media enjoyed the most growth in June, with 2.1 percent more jobs, attributed to the growth in online media.

"The only area of real positiveness is the Internet, Graphics and Multimedia space which is up 1.7 percent for the month and 16 percent for the year. Although organisations are feeling the pinch, it's money well spent in terms of Web site presence and advertising online."

Despite the overall downward trend Olivier said the contracting market has continued to perform strongly in the IT sector.

"People are in on projects; they commit to them and see them through so that is holding up well... but it's more a matter of when those projects come to an end is there going to be as much work to replace it? That is more doubtful," he said.