June 2025 UK Labour Market Report: Tech and Engineering Jobs Shine Amid Economic Caution

Stay informed with the latest insights into the evolving UK employment landscape, courtesy of the KPMG and REC ‘UK Report on Jobs’ – June 2025. Compiled by S&P Global, this authoritative monthly report offers real-time analysis of national hiring trends. In partnership with leading recruitment consultancies, including Redline Group, it provides vital intelligence for employers and jobseekers navigating a dynamic labour market.

While the broader UK economy continues to show signs of restraint, the technology and engineering sectors are defying the trend, offering clear signals of resilience, skills demand, and hiring momentum.

While headlines often focus on downturns and slowdowns, the latest UK Report on Jobs (June 2025) reveals some remarkably positive developments in the tech and engineering sectors, continued signs of resilience, demand, and potential for growth.

Key Highlights: June 2025 UK Job Report

Engineering Leads Job Market Growth

Despite a continued slowdown across many industries:

• Engineering was the only sector to report increased demand for temporary roles, signalling agility and growth in short-term technical projects.
• It also recorded the strongest rise in permanent vacancies—outperforming traditionally robust sectors like healthcare and IT.
• These trends reflect growing investment in innovation-led projects, especially across manufacturing, infrastructure, renewable energy, and automation.

Candidate availability:

• The availability of permanent and temporary staff rose sharply, marking the fastest rate since December 2020.
• This expansion is driven by rising redundancies and candidate re-engagement following economic uncertainty.

Salaries and Contract Pay on the Rise

• Permanent starting salaries grew at the fastest rate in nine months, spurred by competition for high-calibre professionals.
• Temporary/contract pay rates also saw their strongest year-on-year increase, supported by national minimum wage reforms and higher demand for skilled contractors.
• The sharpest wage increases were reported in London and the North of England, aligning with regional tech and engineering hubs.

Expert Commentary on the UK Hiring Climate:

Jon Holt, Group Chief Executive and UK Senior Partner KPMG, commented on the market:

“The first half of this year has been full of uncertainty for businesses who are still trying to navigate cost pressures, technology advancements and global risks. Business leaders will want to see how the new trading agreements with the US and EU, Government spending plans and the Modern Industrial Strategy will drive forward our economic growth. To boost the jobs market employers, need to feel confident about the outlook and understand how AI will impact their business.”

Neil Carberry, REC Chief Executive, added further context, stating:

“More encouraging signs in temporary billings, vacancies, and stabilising private sector demand offer a measure of optimism as we head into the second half of the year. There are early signs of promise, particularly in the Midlands, which saw its first increase in permanent placements in a year and a rise in billings after four months. Meanwhile, the downturn in temporary billings has eased further in London and the North of England.

“The big test now is whether the Spending Review convinces more employers to dance at the party by turning intent on hiring and investing into action. The Spending Review delivered a big hit in terms of eye-catching spending on technology and energy, but the lack of announcements on workforce matters is badly out of step with its desire to build a deep pool of talent.

“With the Industrial Strategy imminent, businesses are looking for more than talk of renewal, they want a clear plan for an economic revival. One that acknowledges the central role of good workforce policy – beyond just employment rights. That means putting workforce matters at the heart of the agenda, not treating it as a compliance issue.

Latest UK Labour Market Statistics – May 2025

Job Vacancies: According to the ONS, UK job vacancies declined to 761,000, the lowest in four years. Down 42,000 in the three months to April.

Wage growth: Average weekly earnings rose by 5.9%.

CPI Inflation: 3.4% (down from 3.5% in April)

Top In-Demand: Highlighting Innovation Push

The Electronics, IT, and Engineering sectors remain at the forefront of hiring, with employers actively seeking:

• Electronics & Electrical Engineers
• System Engineer
• Data Scientists
• Cybersecurity Specialists
• Full-stack Developers
• Software Engineers
• Technical Sales Engineers

These skillsets reflect the continued push toward digitalisation, AI integration, IoT expansion, and smart manufacturing..

Global Outlook:

According to the J.P. Morgan Global Manufacturing PMI:

• The Global PMI dipped to 49.6, a five-month low.
• Despite this, business confidence and employment sentiment have improved, partially due to US-China tariff compromises.
• Supply chains remain under pressure, but stabilisation is emerging in key markets.

Outlook: Engineering & Tech Continue to Lead the UK Recovery

Despite macroeconomic caution, the outlook for engineering and tech jobs remains positive:

• Employer demand for niche technical skills is growing.
• Wage inflation is sustaining upward momentum.
• Regions like the Midlands and North of England are showing early signs of recovery.

Now is a strategic moment for employers to invest in talent pipelines and for professionals to explore career progression in future-focused sectors.

Partner with Redline Group – Experts in Engineering and Technology Recruitment

At Redline Group, we change lives every day, building world-class teams for technology companies. As one of the UK’s most trusted recruitment specialists in Electronics and High Technology, we offer expert solutions for professional Contract, Permanent, and Executive positions. With four decades of experience, we are perfectly positioned to future-proof your hiring needs.

Contact Redline Group today for bespoke recruitment advice or to discover how we can help you build high-performing teams - info@redlinegroup.com or 01582 450054