UK Recruitment Market Snapshot — September 2026

Permanent hiring finally returns to growth as temp recruitment maintains momentum

here’s another encouraging shift in the UK recruitment market this month.

Our September snapshot brings together the latest findings from four major market reports – the KPMG and REC UK Report on Jobs, S&P Global UK Services PMI®, S&P Global UK Construction PMI® and J.P. Morgan Global Manufacturing PMI® – to give recruitment agencies one straightforward view of what’s happening across the market.

And after the tentative signs of improvement we highlighted last month, August’s data takes another step forward.

Permanent placements increased for the first time since September 2022, while temporary billings recorded their fifth consecutive month of growth.

The wider picture isn’t completely clear-cut. Vacancies are still falling, candidate availability remains high and construction continues to struggle.

But confidence appears to be returning gradually – and, importantly, temporary recruitment is now complementing an improving permanent market rather than being the only area showing momentum.

MARKET SNAPSHOT: 5 Key Numbers

52.4

Temporary Billings Index: Temp billings increased for the fifth consecutive month, with growth the second-fastest since April 2023.

50.5

Permanent Placements Index: Permanent placements increased for the first time since September 2022.

47

Total Vacancies Index: Overall demand for staff is still declining, although the rate of deterioration remains much softer than seen through much of the downturn.

52.5

UK Services PMI: UK services activity expanded again in August, while new work increased for the second month running.

44.3

UK Construction PMI: Construction activity remained in contraction, although reductions in new orders and employment eased.

Permanent recruitment finally moves into growth

Last month, we reported a significant milestone: permanent placements had stopped falling after a 45-month downturn.

This month brings another.

The KPMG and REC UK Report on Jobs shows that permanent placements increased during August for the first time since September 2022.

The increase was only marginal, with the Permanent Placements Index reaching 50.5, but after such a prolonged period of contraction, the change in direction matters.

Recruiters linked the improvement to businesses expanding capacity, new contract wins and a relative improvement in market confidence. However, some clients are still delaying recruitment because of uncertainty around the economy and future government policy.

There are also significant regional differences.

Permanent placements increased in London and the Midlands, while the South and North of England continued to report declines.

So, this isn’t a nationwide recruitment recovery just yet.

But after nearly four years without growth, it’s an important step in the right direction.

Temp recruitment keeps its momentum

Temporary recruitment continues to provide one of the strongest signals in the market.

Temp billings increased for a fifth successive month in August, with the rate of growth accelerating from July.

At 52.4, the Temporary Billings Index recorded its second-fastest rate of growth since April 2023, behind only June this year.

Recruiters reported that increased contract work and employers’ continued preference for temporary staff were supporting the rise.

Growth was also relatively widespread geographically. Three of the four English regions monitored reported higher temp billings, led by the North of England. The Midlands was the only region to record a decline.

Vacancy data was more mixed.

Temporary vacancies rose across four of the ten sectors monitored, with Blue Collar and IT & Computing leading growth. Hotel & Catering and Retail recorded the sharpest falls.

For recruiters, the message remains similar to recent months: employers still value flexibility.

But there is an important difference now.

Temp is no longer the only part of the recruitment market showing positive movement. We’re beginning to see temporary recruitment sitting alongside an improving permanent market.

For perm-led agencies considering adding temp or contract recruitment, that makes the opportunity less about replacing one model with another and more about being able to offer clients both.

Vacancies are still falling – and candidates remain plentiful

The improving placement figures shouldn’t disguise the fact that underlying hiring demand remains cautious.

Overall vacancies fell again during August, continuing a decline that has now lasted almost three years.

Permanent vacancies increased in just two of the ten sectors monitored – Engineering and Accounting & Financial. The remaining eight recorded declines, with Retail and Hotel & Catering experiencing the sharpest reductions.

At the same time, candidate availability continues to increase significantly.

The latest Report on Jobs describes staff availability as continuing to rise markedly, reflecting redundancies, reduced hiring opportunities and candidates looking for new roles.

That creates an interesting recruitment market.

There may be plenty of candidates available overall, but employers can still struggle to secure the specific skills and experience they need.

That’s reflected in pay.

Permanent starting salary growth reached its strongest level since January, while temporary wages also continued to increase.

For recruitment consultants, that creates an opportunity to add value beyond simply supplying CVs.

Helping clients understand candidate availability, salary expectations and where genuine skills shortages remain can make market insight an increasingly important part of the recruiter-client relationship.

Services strengthen while construction remains under pressure

The wider UK economy helps explain why recruitment confidence is improving – but also why employers remain cautious.

Services

The S&P Global UK Services PMI Business Activity Index increased to 52.5 in August, signalling another month of growth.

Business and consumer spending improved, contributing to the fastest expansion in service-sector output since April, while new work increased for a second consecutive month.

There was also an improvement in business confidence.

However, stronger activity hasn’t yet translated into widespread employment growth.

Service businesses continued to reduce headcount as high costs encouraged tighter recruitment policies. The positive news is that the pace of job losses was the slowest since October 2025.

That gap is worth watching.

If workloads and sales pipelines continue improving while employers remain reluctant to add permanent fixed costs, flexible staffing could continue to play an important role.

Construction

Construction remains much weaker.

The S&P Global UK Construction PMI slipped from 44.7 in July to 44.3 in August, remaining below the 50.0 level that separates growth from contraction.

Residential construction was particularly weak, while commercial activity remained much closer to stabilisation. New orders and employment continued to decline, although both fell more slowly than previously.

One detail is particularly relevant to recruiters operating in the sector: subcontractor usage moved back into growth, reaching 51.7 in August after 47.3 in July.

So while overall construction conditions remain difficult, businesses may be showing greater willingness to use flexible resource rather than commit to permanent headcount.

Manufacturing adds to the cautiously positive picture

The fourth report in our snapshot – the J.P. Morgan Global Manufacturing PMI – covers the global rather than solely UK manufacturing economy, so its findings need to be treated differently from the three UK-specific reports.

Globally, manufacturing strengthened during August.

The headline PMI increased from 52.1 to a three-month high of 52.3, remaining above the 50.0 growth threshold for a thirteenth consecutive month.

Output, new business and employment all expanded at faster rates, while new export orders increased for the first time in four months.

Employment growth across global manufacturing also reached a three-year high.

Those are global figures, so they shouldn’t be interpreted as UK recruitment statistics in isolation.

However, the report’s UK data also placed the UK among the manufacturing economies recording output growth during August.

Combined with improving UK services activity and the positive movement in recruitment placements, it adds to the sense that economic conditions are gradually becoming more supportive.

What does this mean for recruitment agencies?

September’s data marks another important progression in the story we’ve been following throughout 2026.

First, temp billings began to grow.

Then temporary vacancies returned to growth.

Last month, permanent placements finally stopped falling.

Now permanent placements are growing again.

That’s encouraging.

But this remains an uneven recovery.

Vacancies are still declining overall. Candidate supply remains high. Construction is still contracting. And employers continue to face significant cost and economic uncertainty.

For agencies, that means this probably isn’t the moment to expect the market simply to return to the conditions of previous high-growth years.

Instead, the opportunity may lie in being able to respond to different types of client demand.

Some businesses are beginning to recruit permanently again.

Others still want the flexibility of temporary and contract workers.

And some may need both.

For agencies capable of offering clients that choice, the improving market could create more opportunities to deepen existing relationships rather than waiting for entirely new demand to appear.

“There’s a real change in tone in this month’s figures. Permanent placements growing for the first time in nearly four years is a significant milestone, while temp billings have now increased for five months running. What’s particularly interesting is that it doesn’t have to be a choice between perm and temp. Clients are looking for different ways to access the people they need, and agencies that can offer that flexibility could be in a very strong position as confidence continues to return.”

Rik King, Director at QUBA Solutions

The QUBA view

For the first time in a long while, both permanent placements and temporary billings are growing at the same time.

That matters.

It suggests employers aren’t simply switching permanent roles for temporary workers. Instead, we may be starting to see recruitment demand gradually broaden as businesses become more confident about moving projects and investment plans forward.

For temp recruiters, continued billings growth is encouraging.

For perm recruiters, the return to placement growth is welcome news.

And for perm-only agencies, the continued strength of temporary recruitment may still be worth exploring – particularly if existing clients are beginning to ask for more flexible workforce solutions.

Thinking about adding temp or contract recruitment?

If clients are asking you for temporary or contract workers but funding, payroll, credit control or back-office administration are preventing you from saying yes, QUBA can help.

We provide recruitment agencies with the funding and operational support they need to pay workers on time and grow their temp book without waiting for clients to settle their invoices.

Talk to QUBA about making the move into temporary recruitment.

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• KPMG & REC UK Report on Jobs – Sept 2026
• S&P Global UK Construction PMI – Sept 2026
• J.P. Morgan Global Manufacturing PMI – Sept 2026
• S&P Global UK Services PMI – Sept 2026