Fear that an oversupply of graduates in Britain means that having degree is no longer a guaranteed ticket to a lifetime of higher earnings appear to have been dispelled as new figures show that graduate vacancies and salaries have risen for the second year running.
The latest survey from the Association of Graduate Recruiters (SGR) reveals that the number of positions for graduates leaving university this summer up by 11.3 per cent on last year.
This rise in vacancies is reflected in a fall in applications per vacancy. Employers received an average of 32.9 applications for every vacancy during the 2004-5 recruitment year compared with 37.6 applications per vacancy in 2003-4.
Graduate starting salaries also continue to rise. Employers will be paying this year's new graduates a median starting salary of £22,000 compared with £21,000 last year, a year-on-year increase of 4.8 per cent.
This is the largest increase in salaries for more than five years and the third consecutive year that salaries have risen by more than the cost-of-living.
However the median figure hides a wide disparity in starting salaries. Investment banks are offering starting salaries of £35,000 or more, with consultancy and law firms paying around £28,000.
In contrast, media organisations offer less than £20,000, with insurance companies the worst payers, offering only £14,000 a year.
"A closer look at the statistics suggests that there may be some mismatch between graduate aspirations and market conditions," said Carl Gilleard, the AGR's chief executive.
"For example, accountancy and professional services firms report one of the largest increases in vacancies but the smallest number of applications."
The survey also showed that the most popular employers were fast-moving consumer goods companies, who reported an average of 122 applications per vacancy and investment banks who received 42.
The lowest number of applications per vacancy was reported by accountancy and professional services firms - 16 applications per vacancy Ė largely because of the huge numbers being recruited to this sector.
The largest increases in vacancy levels in 2005 were reported by IT companies (47 per cent), accountancy and professional services firms (20 per cent), investment banks (17 per cent) and retailers (9 per cent).
Overall, the number of graduate jobs has increased by more than 20 per cent since 2003 while the median starting salaries for university leavers joining graduate schemes have risen every year for the past five years.
But research carried out earlier this year at Swansea University found, choosing the right degree is crucial if graduates are to reap the maximum benefit from their investment in university.
While maths, computing and engineering graduates can expect to earn £222,000 more during their lifetimes than non-gradates, an over-supply of arts and humanities students means that male arts graduates can expect to earn just £22,000 more than non-graduates over the course of their working lives.
Carl Gilleard said the findings were clearly "good news for graduates".
"There have been consistent above-the-rate-of-inflation rises in salaries for three consecutive years. This suggests that employers do value graduates who can offer the right skills and experience," he insisted.