The Midland operations at headhunting firm Harvey Nash has thrived amid a downturn in national confidence which is forcing firms to delay decisions on top level posts.

Rising oil prices, uncertainty over interest rates and slower consumer demand meant less firms were filling senior positions in its London office.

But the company was more upbeat about is Midland office, which has increased its staff and taken over the running of operations in Leeds and Manchester.

The number of people working from the site, which is located near to the NEC, has risen from 165 to 245 in the last year.

Much of its success has been based around the outsourcing of IT work to countries like Vietnam, where the work is project managed from the UK.

Albert Ellis, the new chief executive of the firm, said: " The Birmingham office, which has concentrated on outsourcing business, has been the best performing in the group for the last 12 months.

"They have tough comparable with last year, but they are neck and neck with London so far this year."

Shares fell 18 per cent despite the company revealing it had moved into the black.

The improvement came after an increase in demand at its core resourcing division, which finds regular IT staff for companies and accounts for 92 per cent of revenues.

Harvey Nash, which employs more than 2,000 staff at 26 offices worldwide, said it cut staff numbers at the consulting arm after the business failed to hit hopes in the last quarter of the year to January


It said: " Whilst still profitable, consulting's revenues are likely to be lower in the current year than last year."

Harvey Nash said it expected its markets to remain competitive over the next three years and that growth rates would be "stable".

As a result, it was planning to invest £1 million over the next 12 months in infrastructure, staff and new services to start its three-year turnaround drive.

At the bottom line, the company made pretax profits of £1.2 million against a deficit of £4.5 million last time. The previous figure included £3.5 million of charges related to the integration of acquisitions, compared with a charge of £200,000 last year.

Underlying annual profits more than doubled to £4.5 million, while sales lifted to £ 163.4 million from £130.9 million.