Employment hits 14-year low as output drops in ‘golden quarter’
Employment hits 14-year low as output drops in ‘golden quarter’
- BDO’s Output Index sees largest monthly fall in over three years, led by services slowdown in November
- Employment Index drops to lowest level since April 2011 with hiring held back due to business caution and rising costs
- UK business output fell sharply in November as employment hit a new 14-year low, according to the latest Business Trends report from accountancy and advisory firm BDO LLP.
Services slowdown hits output in ‘Golden Quarter’
Despite November traditionally marking a ‘golden quarter’ for trade and consumer activity, BDO’s Output Index dropped 4.08 points last month to 97.77, down from 101.84 in October. This marked its steepest monthly decline since April 2022, when energy and commodity prices started rising significantly.
Compared to this time last year, when the Output Index stood at 98.67, November’s reading highlights a weakened picture for businesses. The latest drop was mainly driven by a slowdown in the services sector, where output fell from 102.75 to 98.12 as a result of subdued consumer confidence and elevated inflation. This is at odds with the traditional ramping up of activity we often seen ahead of the festive period.
With businesses facing ongoing cost pressures around staffing and wage inflation and more cautious consumer spending, many firms appeared to adopt a ‘wait-and-see’ approach. This was also driven by ongoing caution around the Autumn Budget, as businesses and consumers waited for clarity on policy announcements.
Employment at new 14-year low
Against this backdrop of falling output and subdued demand, BDO’s Employment Index fell to 93.53 in November, a new 14-year low as its weakest reading since April 2011. The data reflects broader labour market softening, with job cuts, weaker hiring intentions and ongoing caution around payroll costs.
The UK unemployment rate reached 5.0% in Q3, the highest in over four years, while payroll employment fell by 32,000 on the month across both September and October. Although vacancies ticked up slightly in November, this is likely tied to short-term festive recruitment rather than any broader recovery in hiring. Businesses maintained a ‘low-hire, low-fire' approach to holding back on any major workforce decisions, as they awaited more clarity from the Autumn Budget in the second part of the month.
With further wage pressures and new employment legislation due in early 2026, labour market conditions are expected to remain under strain well into the new year.
Scott Knight, Head of Growth at BDO, said:
“The run up to Christmas is usually a golden time where business booms and revenues are shored up, but so far this year it’s falling flat. With output down and employment the worst we’ve seen since the financial crash, the growth outlook is bleak and there was little in the budget to get things moving.
“In a running theme, businesses need optimism if they’re to invest, grow and hire. If not, we’ll be stuck in this holding pattern at best well into the new year.”
ENDS
Overview of the BDO indices
An overview of all four indices is provided in the table below, detailing figures for the last three months and the same month of the previous year, to allow for comparison. 100 = average value. Above 95 = positive.
BDO’s Business Trends is comprises multiple surveys covering 4,000 respondents. Further information on inputs and the data included is available on request, but please note the ONS Labour Force Survey is not one of them.
|
November 2025 (figures for this report) |
October 2025 | Septermber 2025 | August 2025 | July 2025 | June 2025 | May 2025 | |
|
BDO Optimism Index |
93.45 | 93.30 | 93.38 | 93.18 | 91.96 | 91.58 | 92.30 |
|
BDO Output Index |
97.77 | 101.84 | 97.84 | 97.61 | 98.14 | 98.64 | 97.40 |
|
BDO Inflation Index |
99.07 | 99.28 | 101.02 | 100.57 | 99.72 | 99.10 | 99.59 |
|
BDO Employment Index |
93.53 | 93.95 | 93.90 | 94.01 | 94.11 | 94.22 | 94.32 |
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