The annual What Graduates Do? study, by the ÖйúAƬ Careers Services Unit (Hecsu), is based on the survey responses of 233,864 graduates from the class of 2010.

It says that six months after finishing their courses, 69.7 per cent were in employment ¨C a 7.9 per cent increase on last year. The report also says that 63.4 per cent of respondents had graduate-level jobs, an improvement of almost 10 per cent on the previous year.

But it warns that while unemployment has fallen (from 8.9 per cent to 8.5 per cent year on year), ¡°it remains high in comparison to levels reported at the beginning of the recession and graduates still face stiff competition - not just from their peers but also from more recent graduates¡±.

Charlie Ball, deputy research director at Hecsu, said: ¡°Slow but sustained economic recovery should be mirrored in the graduate labour market but developments over the next few months will need to be closely monitored.

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¡°Many parts of the graduate employment market remain fragile, and recovery has not spread to all sectors or regions of the country.

¡°The jobs market for graduates is still vulnerable to bad economic weather and a continued recovery cannot be guaranteed in the current climate.¡±

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The report notes that government spending cuts have affected the number of graduates entering local government, public administration and defence sector jobs.

It adds that the marketing and advertising and architecture sectors saw the most substantial improvement in graduate recruitment, up with 31 per cent and 73.2 per cent respectively on last year.

john.elmes@tsleducation.com