UK Vacancies by Sector in 2026: Who Is Still Hiring and Who Has Gone Quiet

The latest ONS Vacancies and Jobs bulletin, covering November 2025 to January 2026, confirms what many jobseekers already suspect: the UK labour market is cooling unevenly. Total vacancies stand at an estimated 726,000, down 73,000 (9.2%) from the same period a year ago and still 8.7% below their pre-pandemic level. Fourteen of the eighteen tracked industry sectors recorded annual declines.

But averages obscure the real story. Some sectors have slashed hiring by a third. Others are quietly growing. If you are weighing a career move, the sector you target matters more now than it has in years.

39 Consecutive Quarterly Declines

The ONS notes that vacancies experienced 39 consecutive quarterly falls from April to June 2022 before flattening out in late 2025. That represents the longest sustained contraction in the vacancy survey’s history. The unemployment-to-vacancy ratio has climbed to 2.6, meaning there are now 2.6 jobseekers for every open position. A year ago that figure was 1.9. The last time the ratio was this high outside the pandemic was in early 2015.

This tightening is not just statistical background noise. The KPMG and REC UK Report on Jobs for March 2026 shows that permanent placements have now declined for 41 consecutive months. Only the North of England recorded growth in February. Vacancies tracked by recruitment consultancies fell for the 28th straight month, though the pace of decline was the softest in nine months.

In practical terms, the market is no longer in freefall. But it is far from recovery.

The Sectors Where Vacancies Are Falling Fastest

Construction has been hit hardest. ONS data shows vacancies in the sector dropped 32.4% year-on-year, with only around 28,000 openings remaining. The British Construction Industry Service estimates a vacancy-to-filled-post ratio of just 1.8 per 100 positions, one of the lowest readings in recent years. Rising material costs, planning delays and employer caution around the new Employment Rights Act have all contributed.

Mining and quarrying followed with a 26.7% annual decline, though the sector’s small overall size means the absolute numbers are modest.

Retail and hotel and catering saw the steepest falls in the KPMG/REC survey’s permanent vacancy data. Both sectors face a squeeze from multiple directions: the minimum wage rising another 4.1% to 12.71 pounds per hour in April 2026, the 25 billion pound National Insurance increase, and cautious consumer spending.

The public sector is also pulling back, with the sharpest drop in demand for permanent public sector roles. Budget constraints and efficiency programmes have left many departments operating on frozen headcounts.

Where Demand Is Holding Up or Growing

Engineering stands out. It was the only sector in the KPMG/REC survey to report stronger demand for permanent staff in February 2026. Defence spending commitments, infrastructure investment and the energy transition are all driving sustained demand for qualified engineers, particularly in electrical, mechanical and systems disciplines.

The ONS data adds further nuance. Arts, entertainment and recreation posted the largest quarterly percentage increase at 12.3%, though from a relatively small base. Manufacturing and transport and storage each added 4,000 vacancies quarter-on-quarter, the largest absolute gains.

Healthcare remains a structural outlier. The NHS alone carries over 112,000 unfilled vacancies according to Career Moves Group analysis, and the UK Trade Skills Index projects the health and care sector will need significant additional recruitment through the end of the decade. The challenge in healthcare is less about demand and more about pay, conditions and training pipeline capacity.

What the KPMG/REC Data Tells Us About Pay

Starting salaries for new permanent hires continued to rise in February, extending an unbroken run of pay growth to five years. However, the rate of increase has moderated. Employers are willing to pay more to secure the right candidate, but the days of aggressive counter-offers and double-digit salary jumps are behind us.

Temporary and contract rates tell a slightly different story. Demand for temporary staff fell more sharply in February, recording the steepest decrease in three months. For contractors, this means the leverage they enjoyed during the post-pandemic hiring surge has largely evaporated.

The picture varies by region. London and the South of England continue to see falling permanent placements, though the declines are softening. The Midlands recorded its first drop in three months, while the North of England was the sole region posting growth. If you are open to relocating, the geography of your job search matters as much as the sector.

The Cost-of-Hiring Problem

Robert Walters’ chief executive described the current environment as the longest recruitment downturn the industry has ever experienced, worse than both the 2008 financial crisis and the pandemic. The firm posted losses of 19.6 million pounds for 2025 and cut nearly a quarter of its UK workforce.

Behind the headline is a structural shift. Employers are not just pausing hiring because of uncertainty. They are recalculating the total cost of employment. National Insurance rises, minimum wage increases, pension auto-enrolment costs and the incoming Employment Rights Act have collectively made each new hire more expensive. Some firms are responding by offshoring support functions. Others are investing in automation. Both trends reduce the volume of mid-level domestic vacancies.

The Chancellor acknowledged during the Spring Statement that unemployment is forecast to reach 5.3% this year. The British Chambers of Commerce projects it could hit 5.5% by December, which would be the highest rate since 2015.

What This Means for Career Planning

In a market where vacancies are down nearly 10% and competition per role is intensifying, broad job searches are increasingly inefficient. The data points to a more targeted approach.

If you are in or considering engineering, defence-adjacent roles or infrastructure, the fundamentals remain strong. These are sectors where government spending commitments provide a degree of insulation from the broader slowdown.

Healthcare and social care continue to offer volume hiring, but the decision to enter these fields should be weighed against long-term earning potential and working conditions. CareerMetrics’ Salary Forecast tool can help model how pay in these roles is likely to evolve over the next five to ten years.

For those in retail, hospitality or administrative functions, the data suggests a more competitive landscape ahead. Understanding where your skills transfer to growing sectors is critical. The Career Explorer on CareerMetrics maps adjacencies between roles, showing which transitions are realistic based on actual labour market data rather than guesswork.

If you are comparing two possible career directions, the Compare Paths tool provides a side-by-side view of salary trajectories, demand trends and regional availability. And if you want to understand how your current compensation stacks up against the market in this shifting environment, Where Do I Stand benchmarks your position using the latest published pay data.

The Bigger Picture

The UK labour market in early 2026 is not collapsing. Vacancies have stabilised after nearly four years of decline, and there are tentative signs of improvement in some regions and sectors. But the recovery, when it comes, will be uneven. Engineering and healthcare will lead. Retail, hospitality and parts of the public sector will lag.

For individual career decisions, the aggregate numbers matter less than the sector-specific data. A 9.2% overall decline means very different things depending on whether you are an electrical engineer in the North of England or a retail manager in London.

The workers who navigate this market successfully will be those who follow the data rather than the headlines.