UK Real Estate "Labour market headwinds persist" Gauge

Research evidence excerpt

UK Real Estate "Labour market headwinds persist" Gauge

Global Research

19 May 2026ab

UK Real Estate Equities

Europe including UKLabour market headwinds persist

Real Estate

Zachary Gauge

Recruitment agencies downgraded Analyst

Our Business Services team released a major sector note yesterday, discussing the zachary.gauge@ubs.com

ongoing risks to European hiring volumes given both cyclical softness and emerging +44-20-7901 5534

structural headwinds. Cyclically, labour demand remains subdued after an unusually Charles Boissier, CFA

prolonged downturn, with staffing volumes still materially below pre-pandemic levels Analyst

and little evidence of a meaningful recovery in hiring appetite—including permanent charles.boissier@ubs.com

roles most relevant to office markets. Structurally, UBS Evidence Lab data suggests an +44-20-7568 4415

accelerating AI adoption could begin to weigh on forward hiring intentions, with a Nadir Rahman

growing share of corporates expecting to reduce headcount or limit incremental hiring Analyst

as technology is deployed. Against this backdrop of muted demand and rising nadir.rahman@ubs.com

uncertainty around the future need for labour, the team has moved to downgrade +44-20-7567 1750

sector expectations, cutting forecasts and valuations as they no longer assume a cyclical

rebound and instead anchor on a lower, more persistent base level of activity, with

additional risks from AI-driven disruption and pricing pressure. While not specific to the

office sector, this dynamic is particularly relevant in (i) permanent hiring trends, which

have the closest linkage to office employment, (ii) the weakness emerging in lower-value

and junior professional roles, and (iii) the broader shift in hiring driven by AI adoption, all