HT in 2025: Snapshot into the Engineering & Manufacturing Recruitment markets

The first half of 2025 has been a mixed bag for the UK’s manufacturing and engineering recruitment market. While demand remains strong in certain areas, employers continue to face significant challenges such as effective budgeting, attracting and retaining talent, and combating the mismatch between available skills and open vacancies.

Key insights since the start of 2025: 

• Job vacancies dropped to roughly 736,000 for March–May, marking the 35th consecutive quarterly decline and a 17% year-on-year fall

• Engineering remains the strongest vacancy driver (having seen a 12% increase from 2024), while hospitality, healthcare, and retail vacancy numbers continue to soften 

• The supply of jobseekers surged—the fastest increase since 2020—driven by redundancies and fewer job openings

• Starting salaries are rising, reaching their fastest pace since August, but remain below historical norms

• The unemployment rate sits at 4.6%, the highest since 2021

• The Bank of England cautioned that heightened National Insurance and minimum wage hikes are deterring hiring

• Temporary staff demand has also dropped, but at reducing pace over the last 3 months, suggesting the downturn in temp roles may be bottoming out.

Outlook for the 2nd half of 2025:

• Make UK's forecast (published in March) suggests the engineering and manufacturing sectors are likely to continue to shrink slightly (–0.5% growth for 2025)

• Despite this, the number of manufacturing and engineering biased vacancies going live in June increased, showing ongoing need for specialist talent

• Temporary and project-based roles are likely to outpace permanent hiring as businesses stay cautious

• Regional recruitment resilience (particularly in the Midlands which saw the lower declines when compared with other regions), suggests hiring demands are still alive in the industry

• Higher employment costs (NICs, living wage) will unfortunately continue to squeeze budgets, so balancing the need to hire to meet demands with budget constraints will be trickier.

Final takeaway:

• No rebound, yet: vacancies are still falling, not rising

• Encouraging momentum: The easing decline suggests that employers are tentatively starting to engage again

• Candidate availability: for both permanent and temporary roles continues to rise

• Engineering & Manufacturing: remain the strongest driver of vacancies

• Expectation: of continued cautious hiring, slower wage growth, and employers focusing on upskilling and retention

IAP Recruitment:

• Our team can support you whether you’re looking for a job or need help filling a vacancy.

• We are a 5* rated company (with over 90 Google reviews)

• Vastly experienced in recruiting within our sectors

• Contact us on 01283 381737 or email our Recruitment Director, Patrick, patrick@iaprecruitment.com.