The latest KPMG and REC UK Report on Jobs, based on data gathered in July 2025, shows the labour market cooling — but engineering is still a standout. Hiring dipped again last month, but demand for engineers is holding strong, keeping the sector ahead.

Economic uncertainty, rising costs, and the growing pains of AI adoption are prompting many businesses to scale back large hiring plans. Yet for engineering employers, this slowdown offers a unique advantage: more skilled candidates are now on the market. The increased availability of experienced engineers presents an opportunity to strengthen teams and secure hard-to-find talent before competition for these professionals heats up again later in the year.

Commenting on the latest figures, Kate Shoesmith, Deputy Chief Executive at the REC, observed:

“Employers are gradually emerging from the woods, gaining optimism for their businesses and the broader economy.

London is setting the pace with a growth in permanent placements signalling the potential for an economic bounce back elsewhere in the country.

In the private sector, permanent staff vacancies rose in July and temp vacancies grew for the fourth consecutive month – to the highest levels since October last year.”

Engineering demand holds firm

Unlike most sectors, engineering was the only monitored category not to register a fall in permanent vacancies during July.

• Permanent engineering roles stay strong, driven by major infrastructure projects, renewed manufacturing investment, and breakthroughs in clean energy and advanced manufacturing.

• Temporary engineering vacancies saw only a slight dip, outperforming most sectors and underscoring the continued demand for specialist contract talent.

Top talent floods the market

The latest report highlights a significant rise in the availability of permanent engineering professionals, extending a UK-wide growth trend in candidate supply that has now persisted for 29 consecutive months.

• Broader expertise available: Employers can now access talent for roles that have historically been difficult to fill, including electrical design engineers, gas engineers, systems engineers, and specialist technicians.
• Oversupply at entry level: A surplus of entry-level engineers offers organisations with strong development pathways the chance to invest in and nurture emerging talent.
• Favourable hiring conditions: Reduced competition from other sectors creates an ideal environment for securing high-calibre engineering candidates.

Skills in high demand

In the engineering sector, demand continues to outstrip supply for both permanent and contract roles, with notable gaps in expertise in the following areas:

Skills in short supply: permanent staff

• Electrical Design
• Electrical Engineers
• Field Service Engineers
• FM Engineers
• Gas Engineers
• Senior Electronic Engineers
• Specialist Engineering
• Systems Engineers
• Technicians Test Engineer

Skills in short supply: temporary staff

• Contract Engineers
• Design Engineers M&E
• Electrical Engineers
• Gas Engineers
• Maintenance Engineers

Pay growth stabilises: an advantage for employers

Starting salary inflation slowed to its weakest pace since March 2021.

• Opportunity to recruit cost-effectively: Employers can hire skilled engineers without the steep salary inflation experienced in recent years.
• Secure top talent at sustainable rates: Well-structured, competitive offers are often sufficient to attract in-demand specialists, particularly in civil & structural engineering and other niche technical fields.

Making the most of the market

This is a rare moment in the job market, where employers benefit from an abundant talent pool and candidates have access to emerging opportunities in growth sectors.

For employers:

• Act Now: Secure high-calibre engineering talent before hiring demand rebounds in autumn.
• Widen Search: Use the increased candidate supply to fill niche and senior roles that have been historically hard to recruit.
• Balance Pay & Perks: Competitive salaries matter, but offering development opportunities and flexible working can be decisive.

For candidates:

• Upskill: With the Government’s Industrial Strategy investing in technical excellence colleges and clean energy skills, engineers should target qualifications in renewables, manufacturing automation, and digital engineering.
• Stay Visible: Engage with specialist recruiters to ensure you’re front of mind when premium roles open up.

While the wider UK jobs market faces headwinds, engineering remains insulated by ongoing investment in infrastructure, energy transition, and manufacturing innovation.

Now is the time for engineering employers to invest in recruitment. The combination of a deep talent pool, stabilising salary growth, and steady demand makes this an ideal moment to secure the skills that will drive future projects.

Your long-term partner for engineering talent success

For over 35 years, we’ve been supporting the engineering community build the future. As one of the UK’s most trusted engineering recruitment specialists across water, green energy, nuclear, infrastructure, transportation, space, and cyber, we deliver expert recruitment solutions for professional contract, permanent, and executive roles.

Contact us today for strategic recruitment advice or to discover how we can help you build high-performing teams.