The US staffing industry faced headwinds in the second quarter, according to data from the American Staffing Association. The number of temporary and contract workers employed by the industry fell 4.6% in the second quarter to an average of 2.5 million when compared to the first quarter.

Typically, the number of temporary workers and contractors grows in the second quarter compared to the first, according to the ASA. The normal cycle sees employment growing each quarter and reaching a high in the fourth quarter before declining in the first quarter of the new year.

“The staffing, recruiting and talent solutions industry faced some headwinds this year as employers across several industry sectors scaled back the massive hiring they undertook in 2021 and much of 2022,” CEO Richard Wahlquist said in a press release.

Still, Wahlquist remained optimistic, saying demand remains healthy and the industry continued to play an important role in providing talent solutions to companies.

“Looking ahead, survey respondents from private staffing firms are cautiously optimistic about demand picking up, with median projected year-over-year fourth quarter results expected to be flat compared to 2022,” he said.

The ASA Staffing Employment and Sales Survey is conducted on a quarterly basis.