Firms nonetheless axing jobs regardless of rebound in enterprise

Companies slashed jobs again this month, despite a pick-up in business.

S&P Global’s index of activity for the private sector – where 50 is the cut-off between growth and decline – hit 53.9 this month.

This was the strongest reading since April 2024 and suggested the economy started 2026 on the front foot.

But the report also showed that firms continued to cut jobs ‘at a solid pace’ as they grappled with ‘subdued demand and rising costs’ and turned to new technologies as an alternative to hiring staff.

Hard times: Official figures showed unemployment at a five-year high of 5.2 per cent

Official figures this week showed unemployment at a five-year high of 5.2 per cent, while the jobless rate among those aged between 16 and 24 is at an 11-year high of 16.1 per cent – sparking fears of a ‘lost generation’.

Chris Williamson, chief business economist at S&P Global, said: ‘Despite enjoying higher demand for goods and services, companies remain focused on boosting productivity to cut costs, resulting in yet another month of steep job losses to prolong the continual jobs downturn that was initiated by the 2024 autumn Budget.’