A Two-Speed Market: What the Latest UK Construction and Hire Data Really Tells Us

The latest UK construction figures paint a slightly confusing picture.

Construction activity is still declining. Housebuilding remains weak. Employment across the sector continues to fall. Yet, at the same time, permanent recruitment has started to improve and some hire businesses are making significant investments in specialist equipment.

So, is the market struggling or recovering?

The honest answer is both.

What we are seeing is an increasingly two-speed market. Businesses with strong balance sheets, secured frameworks or exposure to resilient sectors are continuing to invest. Those relying on general construction activity, thin margins or work that has not yet been awarded are having a much tougher time.

For employers and candidates, understanding which side of that divide a business sits on has never been more important.

Construction has now contracted for 20 consecutive months

The August S&P Global UK Construction Purchasing Managers’ Index fell to 44.3, down from 44.7 in July. Any figure below 50 indicates contraction, making this the twentieth consecutive month in which activity has declined.

Housebuilding remained the weakest part of the market. Commercial construction and civil engineering improved slightly, but not enough to pull the wider sector back into growth.

Employment also continued to fall, although there was one small positive: job losses were recorded at their slowest rate since September 2025. Input-cost inflation eased to its lowest level since February too, providing a little relief for businesses already operating on tight margins.

This is not evidence of a broad recovery. General construction and housebuilding businesses are still likely to be cautious about adding permanent overhead, particularly where new roles depend on work that is expected rather than secured.

That distinction matters in recruitment conversations. A vacancy created to deliver an awarded infrastructure contract is a very different proposition from one based on the hope that the market will improve later in the year.

Employers looking to attract strong candidates need to be able to explain why the role exists, where the work is coming from and how secure the opportunity really is. A vague assurance that “we’ve got lots coming up” is unlikely to convince someone to leave a stable employer in the current climate.

Recruitment is improving, but skilled candidates are not suddenly cheap

Against that difficult construction backdrop, the latest KPMG and Recruitment & Employment Confederation Report on Jobs offered a more encouraging signal.

Permanent placements increased in August for the first time since September 2022. Temporary billings also rose at the second-fastest rate in more than three years.

However, the detail is important. Vacancies still declined overall and candidate availability increased sharply, partly because of redundancies. At the same time, starting salaries for permanent roles rose at their quickest rate since January.

In other words, there may be more people actively looking for work, but that does not mean there is an abundance of experienced fitters, depot managers, technical salespeople, service controllers or specialist operators available at bargain-basement salaries.

Businesses are still competing for proven people with the right sector knowledge and relationships. Employers that delay decisions, pitch salaries below the market or assume candidates should simply be grateful for an offer may find that the person they want has already gone elsewhere.

For candidates, the improving recruitment figures are welcome, but they do not remove the need to examine an opportunity properly. Why is the business hiring? Is it a replacement or a growth position? Is the work awarded? How strong is the order book? These are entirely reasonable questions.

The strongest contractors are pulling further ahead

The Construction Index’s 2026 Top 100 provides perhaps the clearest evidence of the divide developing across the industry.

Combined turnover among the companies listed increased by approximately 6%, while profits rose by 17%. On the surface, those figures sound extremely positive.

Dig a little deeper, however, and the picture becomes far less comfortable:

Thirteen of the Top 100 businesses were loss-making.
Around £12bn of combined turnover came from companies assessed as high risk.
Specialist-contractor insolvencies increased by 20% during the second quarter.
A quarter of the Top 100 operated on pre-tax margins below 2%.
Larger, well-capitalised contractors are securing a growing proportion of framework work.

Turnover alone is therefore a fairly blunt measure of business strength. A contractor can be exceptionally busy while making very little money from the work it delivers.

The strongest businesses increasingly have the balance sheets, framework experience and financial resilience needed to win long-term programmes. Smaller contractors and supply-chain partners are left dealing with rising employment costs, slow payment and very limited room for projects to go wrong.

This also affects candidate movement. Experienced people are understandably wary of leaving a secure national or established specialist to join a business whose pipeline or financial position is unclear. Employers need to treat stability as part of their candidate proposition, alongside salary, benefits and career progression.

Temporary power remains a genuine growth market

While the broader market remains difficult, specialist temporary power continues to attract investment.

Sunbelt Rentals has expanded its large-power fleet with new Cummins-powered 1,250kVA generators. The equipment will support multi-megawatt and high-voltage systems across power transmission, infrastructure, data centres and other critical projects.

This follows Finning Power Rental’s recent investment in a major new depot in Ashford, Kent, serving London and the South East.

These developments point to a clear shift away from straightforward generator hire towards complete, technically designed power solutions. Customers increasingly require survey, design, installation, controls, high-voltage capability and ongoing operational support.

That creates demand for a more specialised workforce, including HV-qualified engineers, generator and controls technicians, applications engineers, power-project managers and technical salespeople who can understand the application rather than simply quote for a machine.

For employers in this market, recruiting someone who has sold generators is not necessarily the same as recruiting someone who can develop and support a critical-power solution. The distinction will become increasingly important as projects grow in scale and complexity.

Specialist lifting businesses are investing too

GT Lifting Solutions has agreed a multi-million-pound purchase of ten Manitou MRT 4080 rotating telehandlers. It is the first ten-unit order in the world for the new 40-metre model and includes a package of specialist attachments.

Again, this is not simply a story about buying more machines. High-reach rotating telehandlers sit much closer to engineered lifting solutions than traditional telehandler hire.

Businesses operating in this space need people who understand lift planning, specialist attachments, site applications and contract-lifting requirements. That means increasing demand for experienced roto operators, technical salespeople, engineers and contract-lifting personnel.

It is another example of investment flowing towards specialist capability rather than general fleet expansion.

What does all of this mean for the market?

The UK construction and hire market is not enjoying a broad recovery, but neither is it uniformly declining.

The strongest opportunities are concentrated around infrastructure, civil engineering, data centres, critical power and specialist lifting. Businesses with secured work and a clear specialism are investing, while those exposed to housebuilding, unconfirmed pipelines or very thin margins remain under pressure.

For employers, attracting good people now requires more than publishing a job description and quoting a salary. Candidates want credible evidence that the business is stable, the work is real and the role has a future.

For candidates, there are opportunities available, but the name or size of a company does not tell the whole story. Understanding its customers, order book, margins and reason for recruiting is essential.

The market is moving. It just is not moving evenly.

KMC Recruitment specialises in recruitment across the UK plant, construction and hire industries. If you are recruiting, considering your next move or simply want an honest conversation about what we are seeing in the market, contact us at josie@kmcrecruitment.co.uk or visit www.kmcrecruitment.co.uk.