‘Bounce back’ in IT contractor demand in July 2026, even if ‘one swallow doesn’t make a summer’
After June's heatwave-linked dip, IT contractor demand is back in growth — its best month in nearly three years. First Point Group, SThree and Morgan McKinley reveal what's driving it, but it’s clearly not being felt by everyone.
IT contractor demand hit a 35-month high in July 2026 — its strongest reading since August 2023 — bouncing back from June's heatwave-linked dip.
The REC's Report on Jobs confirms the almost three-year high, with the agency body saying employers’ “most pronounced” investments in July went into temporary hires.
Key Takeaways
REC data shows tech led July's rebound
Neil Carberry, chief executive of the Recruitment & Employment Confederation (REC), spoke after the report’s publication of IT being one of three key sectors that “led the way” in July.
Obtained by ContractorUK, the REC’s full index provides confirmation.
It shows technology/IT workers on a full-time and contract basis came in at 50.4 and 51.4 respectively, on a scale where 50.0 (and above) is indicative of monthly billings growth.
Over a third of contractors say it’s a vibe shift; a quarter hear from more recruiters
A former IT contractor for Google, Nadine Drelaud, said in a social media post: “I don't want to tempt fate…but I'm feeling like the contractor market and the tech job market in general is now on the up.”
A LinkedIn poll by Drelaud strongly indicates that she’s not alone in noticing a potential upswing in IT contractor demand.
Sixty-one per cent of the poll’s 169 respondents voted positively about the freelance IT jobs market — albeit split between a tangible 24% of contractors who said recruiters were ‘approaching more often’ and a tepid 37% who’d noticed a “minor market vibe improvement.”
First Point Group: IT contractor bounce back from June is real
First Point Group (FPG) says July's bounce-back in IT contractor demand is real, not just sentiment — according to founder-director David Taylor.
“We are seeing a little bit of a natural bounce back from a slow June,” Taylor, FPG’s London managing director said yesterday to ContractorUK.
“Plus, I think there’s a continuation [from May] of clients looking to contractors to deliver a more flexible workforce, in what are still uncertain economic and regulatory environments.”
KPMG: Businesses pressing ahead despite uncertainty
Callum Licence, KPMG’s head of advisory for the UK, said: “Employers have been looking at flexible approaches and hiring has been growing for several months.
“Despite ongoing uncertainty, it’s encouraging that businesses are starting to press ahead with investment, which means across the board we are starting to see the data moving in the right direction. This is most pronounced in the continued rise of temporary work”.
SThree: Enterprise Technology continues to outperform the wider contract market
On Tuesday, SThree signalled that the hirers of IT contractors were still being “selective,” following a softening in demand for those operating as generalists.
But SThree’s head of technology business, Nicholas Tsappis, reiterated yesterday to ContractorUK that enterprise technology, alongside AI and cybersecurity, “continues to outperform”.
Recruiters’ revenues from temps are on the up — again
Three buoyant sectors may be why “revenue from supplying temporary workers has risen for a fourth consecutive month,” the REC’s chief membership officer, Maxine Blight, wrote in July 2026’s Report on Jobs.
However, three strong technology fields won’t sustain an IT contractor hiring uptick, let alone a national jobs market recovery.
REC and KPMG send messages to the new government
The REC's Maxine Blight is calling on government to bring the Industrial Strategy “to life” and apply pragmatism to Employment Rights Act implementation, especially on guaranteed hours proposals.
KPMG’s Mr Licence echoed: “With a new government in place, businesses will be looking for signs that the new policies can translate into greater confidence to invest and hire.”
Morgan McKinley: London to lead UK finance hiring
Morgan McKinley is forecasting London will account for the majority of UK finance hiring for the first time
In research it sent to ContractorUK on July 28th 2026, the City recruiter said the shift is being driven by AI adoption and cloud migration across Banking and Accounting & Consulting.
IT vacancies forecast to jump in Accounting, Consulting and Banking
In “Accounting and Consulting,” IT professional vacancies are forecast to rise by 22%, thanks to AI implementation programmes, continued investment by consulting firms, and finance employers modernising platforms, compliance systems and reporting infrastructure.
In “Banking,” Morgan McKinley said the pool of IT professional vacancies was set to rise by 29%, as firms “accelerate cloud migration, cybersecurity investment and AI adoption.”
Carberry: Government must enable businesses
Online, addressing his ‘followers,’ the REC’s Neil Carberry said: “There is potential to get some confidence and growth going. But it requires government to enable businesses.
“That means… understanding that jacking the cost of doing business is what has held this recovery back for so long…[so it’s] time for pragmatism — not ideology — on key issues like the Employment Rights Act.”
One IT contractor's story: A bittersweet end after 15 years
For senior .NET developer Dave Carson, the calls for pragmatism come too late.
In a July 2026 update, Carson shared: “Today is bittersweet for me as it signifies the dissolving of my second contracting [limited company], striking it from the Companies House Register.
“Bitter, because it signifies the end of my contracting career that started back in 2011; [which] took a hiatus during the pandemic and finally came to an end following a lack of support from successive governments, and the changes to IR35.
“Sweet, because I am free of the burdens that are shovelled onto small businesses here in the UK, making them non-viable”.
Which tech skills are in short supply?
The REC's Report on Jobs names 21 technology skills “in short supply” in July 2026 — and Carson's specialism, .NET, isn't one of them.
Both the contract and full-time IT job markets were scarce last month of the same eight skills: AI/ML Developers, AI/ML Engineers, Cybersecurity, IT, Software, Software Developers and Software Engineers, and Technology.
Full-time versus freelance: Nine plays four
The full-time tech jobs market was uniquely scarce of Analysts, Business Analysts, Business IT Experienced, Data Annotators, Digital, IT Helpdesk, IT Procurement Specialists, Senior IT Developers and Technical Roles.
The contract IT labour market was uniquely scarce in July 2026 of AI Project Managers, Cloud Computing, Full Stack Developers, and Security Cleared IT.
Contractors and recruiters: Cautious, unconvinced, and the wait-and-see
Excel/VBA isn't on the REC's shortage list, but that hasn't stopped Stephen Donaldson landing his first meaningful temporary placement in 12 months.
“Thankfully, I'm currently busy on the first decent bit of contract work I've had for a year,” Donaldson wrote in July. “But can I call it an ‘upturn’? No. It was a returning client.
“‘One swallow doesn't make a summer,’ as they say, but it's certainly welcome.
“I'll only call it 'better' when I start getting calls from agents again — and that hasn't happened for many moons.”
“It will be interesting to see if this trend continues,” First Point Group’s David Taylor told ContractorUK last night. “As the new government’s policies become clearer, and even start to be implemented, hopefully some greater business confidence will return to the [contract IT jobs] market.”
