(Adds details from results in paragraph 2, CEO comment in paragraph 3, sector background in paragraph 4 & 5)

Oct 12 (Reuters) - British recruitment firm Hays forecast a fall in first-half profit on Thursday after reporting lower quarterly net fees, due to lower client and candidate confidence in permanent hiring sector.

Hays, which had in August warned of lower first-half net fees, said profits in the six months ending Dec. 31, 2023 would fall impacted by foreign exchange headwinds and fewer working days in its largest market Germany.

"Temp & Contracting, our largest business and a key strategic focus, produced a resilient performance, although Perm markets remain more difficult, with increased time-to-hire," CEO Dirk Hahn said in a statement.

British recruiters are battling a decline in net fees, mainly dragged by a permanent hiring slowdown as candidates continue to show reluctance to switch jobs and companies take longer to hire.

Earlier this week, peer PageGroup forecast annual profit below analysts' expectations after reporting a 7.9% fall in third-quarter net fees, while Robert Walters retained its annual outlook following a 13% drop in quarterly net fee.

The company, which focuses largely on hiring for white-collar roles, said its like-for-like net fees fell 7% in the first-quarter ended Sept. 30. (Reporting by Prerna Bedi in Bengaluru; Editing by Subhranshu Sahu and Rashmi Aich)