The UK engineering job market is entering 2026 in a period of adjustment. The latest KPMG & REC UK Report on Jobs (December 2025) shows continued contraction in engineering hiring, but with clear signs of stabilisation. While vacancies are lower and hiring decisions slower, demand for specialist engineering skills remains strong and candidate availability is rising sharply.
For engineering employers and professionals, this is a market defined by caution, competition and opportunity.
UK engineering hiring: still down, but gradually improving
Permanent hiring remained in contraction through December 2025. However, the rate of decline has slowed to its weakest level since mid-2024, signalling that the market may be approaching a turning point.
Engineering employers are:
- Delaying non-essential hires
- Taking longer to approve permanent roles
- Prioritising business-critical engineering positions
This reflects ongoing economic uncertainty rather than a lack of demand for engineering capability.
Engineering vacancies continue to fall
Engineering vacancies declined again in December, for both permanent and temporary roles. However, the fall was moderate, suggesting that engineering demand is more resilient than headline figures imply.
Employers are focusing on:
- Replacement hiring rather than expansion
- Engineers tied directly to delivery, safety, maintenance and compliance
- Candidates who can add immediate technical value
The result is fewer vacancies overall, but higher expectations for applicants.
Contract and temporary engineering roles remain essential
Temporary and contract engineering hiring softened in December, but contract engineers continue to play a critical role in workforce planning.
UK engineering employers are using contractors to:
- Maintain project momentum
- Access specialist skills quickly
- Control long-term employment costs
Contract demand remains strongest in maintenance, commissioning, electrical, mechanical and project engineering roles.
Engineering talent availability is rising
One of the most important trends in the UK engineering labour market is the sharp increase in candidate availability. The report shows one of the fastest rises in labour supply since 2020.
This is driven by:
- Redundancies across engineering-led industries
- Fewer active vacancies
- Project delays and restructures
For employers, this creates improved access to experienced engineers. For candidates, it means increased competition for available roles.
Engineering skills shortages remain
Despite a growing talent pool, engineering skills shortages have not disappeared. The report continues to highlight shortages in high-demand technical roles.
UK engineering skills still in short supply include:
- Electrical Engineers
- Mechanical Engineers
- Design Engineers (including M&E)
- Maintenance Engineers
- Project Engineers
- Commissioning Engineers
- Automation and specialist engineering roles
Engineers with niche experience, regulated backgrounds or project-critical skills remain highly sought after.
Salary trends show continued growth
Permanent engineering salaries increased again in December, reaching their fastest growth rate in five months. Employers are still willing to pay more for hard-to-find engineering skills.
However:
- Pay growth is targeted, not universal
- Salary pressure is strongest for specialist engineers
- Temporary engineering rates remain largely flat
The expanding candidate pool is moderating salary inflation, but not eliminating competition for top talent.
What this means for the UK engineering market in 2026
The UK engineering job market is not shrinking – it is recalibrating.
- Employers have a short-term opportunity to secure high-quality engineering talent
- Engineers with in-demand skills remain well positioned
- Hiring confidence is likely to return before vacancy volumes fully recover
Businesses that plan ahead will be best placed when investment and project activity accelerate.
Engineering recruitment: what to know going forward
Engineering remains critical to the UK economy. While hiring volumes are lower, the need for skilled engineers has not diminished. As confidence stabilises, engineering recruitment is likely to rebound quickly, particularly in specialist and project-driven roles.
As engineering recruitment specialists, we are helping clients and candidates navigate this changing market with insight, speed and sector expertise.
If you would like tailored advice on the UK engineering job market, get in touch.