What Can Businesses Expect for the Rest of 2025?
Here are some observations on the outlook for 2025 and what it means for Australian businesses.
Business Confidence
Recent surveys of business owners suggest that they expect slightly worse conditions in the coming year, however overall business confidence is less negative.
In NAB’s Quarterly Business Survey for Q4 2024, the current business conditions index fell by 1 point to –4. However, the business confidence indicator rose by 3 points to -11. These index figures represent net results from a survey of hundreds of SMEs across Australia.
For more details, read the full NAB Quarterly SME Business Survey here.
Interest Rates
Economists predict that interest rates are likely to decrease between now and the end of the year, with rate reductions expected to range between 0.25% and 0.80%. While this should provide some relief, the impact on the business world is likely to be limited.
For more on the interest rate forecast for 2025, read this Canstar article.
Federal Election Outlook
The WA elections and upcoming NSW by-elections could serve as a barometer for the anticipated Federal Election, expected to now occur after Easter.
According to a recent Roy Morgan survey, Australian voters are increasingly concerned about issues such as keeping living costs down and reducing crime, both of which have surged in importance. Meanwhile, issues like climate change and government transparency are seeing a notable decline in significance. This shift in priorities may influence the outcome of the upcoming Federal Election, with cost of living and crime emerging as key voter concerns.
For more on the issues shaping the 2025 Federal Election, see the full Roy Morgan Research article.
Global Economic Outlook: US and China
Australia is facing significant economic challenges from external factors, particularly the ongoing economic situations in the US and China. In 2024, the Australian dollar declined by almost 5.5% against the US dollar and 4.0% against the Chinese renminbi. These fluctuations are linked to Australia’s deteriorating terms of trade and trade outlook.
Though some of these factors—especially China’s domestic economic situation—are beyond Australia’s control, there are still opportunities to influence trade policies, particularly with the US. Australia’s focus should be on minimising the impact of potential tariffs imposed by the United States.
For more insights into Australia’s trade challenges, read the full CSIS report.
So what does all this mean for Australian businesses?
One of the key challenges facing businesses today is rising product input costs, which many companies are unable to pass on to consumers. This, combined with labour shortages and costs, continues to negatively affect profitability. However, despite these difficulties, there is reason for cautious optimism. Recent RBA rate cuts, while modest, seem to have improved general sentiment, indicating that the economy might be heading in the right direction.
There is little business owners can do about the external environment which leaves two main areas for businesses to focus on:
- Improving efficiencies and
- Improving margins through value-added products and services.
Upcoming Events
We look forward to connecting with you at some of the key trade shows in the coming months:
| BAUMA | Munich | 7th April |
| IFFA | Frankfurt | 3rd May |
| Aus Manufacturing Week | Melbourne | 6th May |
| Diesel, Dirt & Turf | Sydney | 16th May |
| LIGNA | Hannover | 26th May |
Important Dates for the Coming Year
| 1st January | Accountant Prepared 2024 financials required Most financiers now require final financial statements for FY24 plus current year management accounts. Our recommendation is to have first draft of your accountant prepared financials no later than 3-4 months after year end. |
| 31st March | Electric Vehicle FBT Exemption ends Talk to us about the potential benefits of a novated lease. |
| 30th April | Eligible FY24 R&D activities need to be registered Feel free to contact us for an introduction to experts in this area. |
| October | Support for Windows 10 and Skype will cease Check your exposure, especially with some manufacturing equipment which may run on these systems. |
| 1st July 2026 | Stricter payroll rules come into effect Superannuation will be payable with each pay cycle, rather than quarterly. Additionally, the ATO’s free super clearing house will be discontinued. |
Transforming Sustainability Data into Business Success
PwC recently released an insightful article on how businesses can improve their operations while addressing their environmental and sustainability impacts.
As more businesses face pressure to provide transparency around their environmental, social, and governance (ESG) commitments, it is expected that legislative requirements for sustainability reporting will increase.
Businesses are increasingly leveraging advanced technology to collect and analyse sustainability data. This data not only helps mitigate risks but also highlights opportunities for improvement and can significantly enhance a company’s reputation.
To learn more, read the full PwC article here.
To finish with a positive quote:
“The road to success and the road to failure are almost exactly the same. It’s not the path that determines success, but your mindset and the decisions you make along the way. Consistency, persistence, and learning from mistakes are what separate those who succeed from those who give up.”
~ Colin R. Davis
We are here to support your business.
Please speak to us about all things finance. Whether it be Equipment and Automotive Finance, Working Capital Finance which includes Debtor and Trade Finance, Property Finance including Construction Finance, Insurance Premium Funding. And yes, we also do Home Loan Finance.
We know that banks are becoming more selective and treating business customers worse than ever – please make us your first point of contact every time – we will get you a better outcome with a far better experience.
