The UK recruitment sector showed early signs of stabilization in February, as the decline in permanent staff placements slowed to its weakest pace in nearly three years. The latest KPMG and REC UK Report on Jobs survey indicates that hiring activity remains subdued but is beginning to show signs of improvement.
The survey, compiled by S&P Global and based on responses from around 400 UK recruitment and employment consultancies between February 10 and February 23, revealed that permanent hiring fell only slightly during the month. This marked the slowest rate of decline since March 2023.
Some recruitment firms reported a modest improvement in employers’ willingness to hire new staff. However, overall labour market conditions remain relatively weak, reflecting ongoing economic uncertainty.
Temporary employment activity also softened. Temporary billings declined modestly in February, reversing a slight increase recorded at the beginning of 2026.
Job vacancies across the UK continued to decline, although the pace of contraction slowed to its weakest level since May 2025. A smaller drop in permanent job openings helped offset a slightly faster decline in demand for temporary workers.
Wage growth also showed signs of cooling. Starting salaries continued to rise, but at the slowest rate since October 2025. The pace of salary growth slowed after reaching a 17-month high in January.
Similarly, wage increases for temporary workers eased compared with the start of the year. Overall, pay growth remained modest and below the long-term average trend.
At the same time, the availability of job candidates increased noticeably. February data showed a stronger rise in the number of available workers across the UK, indicating that more individuals are entering or re-entering the labour market.
Although candidate supply grew faster than in January, the pace of expansion remained below the average levels seen during 2025. The increase was mainly driven by a stronger rise in the availability of permanent workers, which more than offset slower growth in temporary candidate numbers.
Regional data showed mixed labour market trends. Permanent placements declined at slower but still solid rates in London and the South of England, while the North of England recorded an increase in placements. Meanwhile, the Midlands experienced its first decline in three months.
Temporary billings decreased across most regions, with the Midlands being the only area to record growth in temporary employment activity.
Sector data revealed that engineering was the only industry to experience an increase in demand for permanent staff during February. All other sectors monitored by the survey recorded declines.
Among them, the retail and hospitality sectors saw the steepest drops in permanent job vacancies. Retail also recorded the fastest decline in temporary job opportunities.
