According to new research, students graduating this year are facing the worst job prospects in over two decades.

The Graduate Market in 2009, a study of graduate vacancies and starting salaries carried out by High Fliers Research, reveals that overall intake of new graduates has fallen by 17 per cent.

“Many top employers have already received a record number of applications for their 2009 graduate vacancies and most have either filled their remaining places or have closed off the application process," managing director of High Fliers Research, Martin Birchall said.

He continued: "For those who have yet to begin job hunting, the chances of landing a last-minute place on a graduate programme now seem very slim.”

The survey covered companies drawn from The UK Top 100 Graduate Employers 2008, including firms as diverse as Microsoft, MI5, HSBC, Morgan Stanley, Procter and Gamble and Innocent Drinks.

A study conducted with over 1,000 soon-to-be graduates, shows that 90 per cent were pessimistic about finding a graduate position this year.

The current economic climate has resulted in employers seeking experience first, and subsequently financial sectors are being hit hardest, with more than 2,500 entry-level positions being cut from graduate recruitment programmes, and the biggest reductions occuring within retailing, accountancy, and engineering. Particular investment banking has suffered the worst blow, with 47 per cent fewer entry level jobs available than last year.

Additionally, the report warns that 18 per cent fewer graduates than expected were employed last year, meaning that this year's graduates face competition from the class of 2008.

Kyle McAulay, a final year student of Economics at the University of Glasgow, commented: “Reading about the current employment situation in the papers everyday doesn’t make me particularly hopeful about finding a job at all, never mind one I actually want.

“I know graduates from last year who are still currently looking for graduate positions, what chance do this year’s graduates have?”

Two thirds of employers reported a significant increase in applicants for graduate degrees. Furthermore, the UK’s top employers promoted over 40,000 graduate vacancies during the 2008/2009 recruitment seasons, but 7000 were either left unfilled or outright cancelled.

The research registers a shift in priorities of students as well as employers: two thirds of final year students said they had made job hunting a high priority, and one in five have applied to companies they have little or no interest in. Moreover, half of the students polled foresee themselves accepting any position which they are offered.

“It's been a massive consideration when thinking about the next year or two," said Donald Chapman, a final year engineering student at Glasgow University. "I'm thinking about applying for a PhD or doing a TEFL course, so that in a few years when I do start looking for a proper job, the job market might have recovered.”

Those fortunate enough to actually secure an entry level position will benefit from these developments, as average starting salaries are expected to increase by almost six per cent from last year.

Those seeking work in the public sector will be pleased to learn that it is the only area where job numbers have increased, with 51 per cent more positions available since 2007. The Armed Forces for example have increased recruitment for the Army, RAF and Royal Navy by 17 per cent over the last two years.

Ministers have proposed plans for an internship scheme to help graduates develop the necessary experience to find employment.