August was a month of divergence for the North of England’s labour market.

While permanent placements slipped for a third consecutive month, temporary and contract hiring surged, with the Temporary Billings Index climbing to 58.9, its highest reading in over four years and the fastest growth of any English region.

Businesses are clearly getting busier, but many are meeting that demand with contract staff rather than committing to permanent hires.

For Lancashire employers, skills providers, local authorities and economic development partners, the message this month is one of cautious momentum: recruitment activity is picking up, and the pool of available talent is growing at its fastest pace in a year, but converting that activity into permanent, long-term jobs will depend on closing persistent skills gaps in engineering, finance, technology and skilled trades.

Lancashire’s Talent Pipeline Hits a 12-Month High

The standout figure this month is candidate supply. The Permanent Staff Availability Index for the North of England rose to 68.2 in August — its fastest rate of expansion in a year, and by far the strongest of the four monitored English regions (the UK figure was 60.9). Recruiters linked the surge to a combination of redundancies, fewer new vacancies and more people actively entering the job market.

What this means for Lancashire:

• Employers have the deepest pool of permanent candidates available in 12 months, easing pressure on hard-to-fill vacancies.
• Redundancies and restructuring elsewhere are pushing experienced candidates into the local market — an opportunity to secure skilled talent that might otherwise have been out of reach.
• With candidate supply running well ahead of the other three English regions, Lancashire employers are negotiating from a stronger position on salary expectations and notice periods.
• Skills providers and local authorities have a window to fast-track upskilling and job-matching programmes while supply remains elevated.

Permanent Recruitment Continues to Cool

The Permanent Placements Index for the North of England edged up to 48.0 in August but remained below the 50.0 no-change mark for a third straight month, as recruiters continued to link the fall to fewer job openings. Although the pace of contraction eased slightly from July, it remained the steepest among the four monitored English regions — a marked contrast to the UK as a whole, where permanent placements edged above 50 for the first time in nearly four years, helped by a strong rebound in London and modest growth in the Midlands.

What this means for Lancashire:

• Permanent hiring in the North is still contracting even as the UK overall returns to growth — local employers should expect longer lead times to fill senior or specialist roles.
• The gap between London’s rebound and the North’s ongoing decline suggests investment and hiring activity will continue to concentrate away from the region, reinforcing the case for local infrastructure and skills investment.
• With fewer permanent vacancies being opened, competition for the roles that do exist is intensifying — a chance for well-prepared candidates and agile recruiters to stand out.

Temporary and Contract Hiring Surges to a Four-Year High

Temp billings rose for a fourth consecutive month in August, with the Temporary Billings Index reaching 58.9 — its highest reading in just over four years and, once again, the fastest growth of any English region. Temp vacancies also grew for a seventh straight month, albeit at a slower pace than July’s recent peak, comparing favourably with a modest decline at the national level.

Commenting on the results, Chris Stott, Manchester Office Senior Partner at KPMG UK, said the jobs market across the North “remains mixed,” with businesses “getting busier” but “choosing temporary workers over making longer-term hiring commitments.” He added that skills remain in short supply “across areas including engineering, technology and finance,” and that closing that gap will be “important to unlocking stronger growth” — particularly for economies like Manchester’s, where technology, advanced industries and professional services are significant. Maxine Bligh, Interim Chief Executive of the REC, said temp billings momentum in the North “is gathering momentum,” but called on government, business and trade unions to “act to shore up this fragile momentum,” including a more pragmatic approach to the employment rights agenda ahead of the Autumn Budget.

What this means for Lancashire:

• Given Lancashire’s strengths in advanced manufacturing, aerospace, logistics and digital, contract and interim roles look set to remain the fastest-growing route into local employment for now.
• Employers weighing up expansion should expect strong appetite for temporary and contract talent, even where permanent budgets stay tight.
• REC’s call for policy certainty ahead of the Autumn Budget is a cue for Lancashire’s business bodies and local authorities to keep pressing government on employment costs and investment support.

Wage Pressures Build on Both Fronts

Both permanent and temporary pay accelerated in August. The Permanent Salaries Index for the North rose to 53.3 — a ninth consecutive month of growth and faster than July — though it remained softer than both its long-run average and the UK-wide rate of 54.1. Temporary pay grew even more sharply: the Temporary Wages Index climbed to 54.5, its second-strongest reading in over two years, with only the Midlands recording faster temp wage growth among the four English regions. Separately, ONS data showed UK average weekly earnings rose 5.2% year-on-year to £869 in the second quarter of 2026, with the North West among the fastest-growing regions nationally at +7.9% to £797.

Engineering, Skilled Trades and Finance Remain the Key Shortage Areas

This month’s “Demand for skills” data shows shortages concentrated in engineering, skilled trades and accounting/finance roles — echoing Chris Stott’s observation that “skills remain in short supply across areas including engineering, technology and finance.” Given Lancashire’s reliance on aerospace, advanced manufacturing, defence, digital and logistics, these gaps sit squarely in the sectors the county depends on for growth.

Permanent staff shortages:

• Accounting & finance — accountants, accounting technicians, auditors, tax and payroll specialists
• Engineering — control systems, electrical design, stress engineers
• Skilled trades — forklift drivers, HGV mechanics, HVAC and refrigeration engineers
• Legal, technology & technical sales, social work, and sales/demand planning roles

Temporary staff shortages:

• Skilled trades: CNC machinists, welders, mechanical assemblers, HGV/forklift drivers, machine operators
• Accounting & finance support, credit control, tax accountants
• Construction (pipefitters), engineers, conveyancers and catering staff

Implications for Lancashire’s Economy

Opportunities

• ✅ Deepest permanent candidate pool in 12 months gives Lancashire employers more choice and stronger negotiating power on hires.
• ✅ Temp and contract billings at a four-year high create fast-turnaround revenue opportunities for local recruitment and staffing firms.
• ✅ Rising temp vacancies, up for a seventh straight month, point to sustained demand for flexible workforce solutions across Lancashire’s manufacturing and logistics base.
• ✅ Accelerating pay growth for both permanent and temporary staff strengthens the region’s ability to attract and retain talent relocating from slower-growth areas.
• ✅ Above-average temp wage growth (only the Midlands faster) puts more spending power into local economies.

Challenges

• ⚠ Permanent placements have now fallen for three straight months, at the steepest rate of any English region, as employers stay reluctant to commit to permanent headcount.
• ⚠ The North missed out on the UK-wide return to permanent hiring growth, widening the gap with London and the Midlands.
• ⚠ Persistent shortages in engineering, skilled trades and finance risk capping growth in Lancashire’s advanced manufacturing, aerospace and professional services sectors.
• ⚠ Rising candidate availability is partly driven by redundancies and restructuring — a sign of underlying business caution, not pure market strength.
• ⚠ Continued policy uncertainty ahead of the Autumn Budget, flagged by REC, leaves employers hesitant to plan further ahead.

Strategic Conclusion for Lancashire

August’s data paints a North of England labour market moving at two speeds. Permanent hiring remains under pressure, contracting for a third consecutive month and lagging the wider UK recovery, while temporary and contract activity is expanding at its fastest pace in over four years and candidate availability has reached a 12-month high. For an economy like Lancashire’s, built on advanced manufacturing, aerospace, logistics and a growing digital and professional services base, this is a market rewarding flexibility.

The opportunity lies in the scale of available talent and the strength of temp and contract demand — both of which give local employers room to plug gaps quickly and cost-effectively. The risk is that this activity stays contract-led rather than converting into the permanent jobs that build long-term economic resilience, particularly while engineering, skilled trades and finance vacancies remain hard to fill and businesses stay cautious ahead of the Autumn Budget.

In short: Lancashire’s employers have more choice of candidates and a surging temp market to draw on, but converting today’s contract-driven activity into permanent jobs — and closing skills gaps in engineering, trades and finance — will determine whether this momentum holds into autumn.

Source: KPMG and REC, UK Report on Jobs: North of England, compiled by S&P Global. Survey data collected 12–24 August 2026; results embargoed until 00:01 (UK), 7 September 2026.