Surveying the Landscape of 2025: Business Insights for the Year Ahead

4 February 2025

As we approach 2025, businesses have an opportunity to pause, recalibrate, and prepare for the opportunities and challenges ahead. Reflecting on economic forecasts, technological shifts, and legislative changes, it is clear that the next year will demand both adaptability and foresight.  

Economic Landscape: A Slow but Steady Recovery

The Australian economy is predicted to show modest growth and evolving consumer dynamics in 2025. Real GDP is forecast to grow by 2% in 2024–25 and 2.25% in 2025–26, signalling slow recovery after years of turbulence (Australian Government, 2024).  

While gradual improvement is encouraging, businesses will need to navigate a few challenges—including constrained household spending, rising operational costs, and a productivity shortfall—to thrive in this complex environment (Deloitte, 2024). 

Global Influences and Domestic Pressures

The global economy remains fragile, with subdued growth expected despite easing inflation. Geopolitical tensions in the Middle East and China pose risks to energy costs and trade routes, impacting Australian manufacturers and logistics providers through supply chain disruptions and higher input costs (Australian Government, 2024). 

Domestically, high interest rates and cost-of-living pressures will likely dampen consumer spending, forcing sectors like retail and hospitality to streamline operations and focus on value in order to maintain margins. Meanwhile, a softening labour market—with unemployment rising to 4.5% by mid-2025 and wage growth slowing to 3.25%—may challenge businesses in balancing payroll costs and productivity (Australian Government, 2024). 

Balancing Costs and Output Amongst Slow Productivity

Australia’s productivity growth continues to lag, presenting a hurdle to economic progress. For businesses, investing in workforce training, digital transformation, and operational efficiency will be key to offsetting rising costs and improving output. “The solution to lifting supply capacity lies in improved productivity, not simply crushing demand with higher interest rates,” explains Stephen Smith, Deloitte economics partner and Economics Business Outlook report author (Deloitte, 2024). 

Investment in infrastructure, renewable energy, and technology continues to drive growth, with projects in data centres, green energy, and logistics infrastructure creating significant opportunities for businesses in these sectors (Australian Government, 2024). However, companies in less prioritised industries may face challenges in securing funding and will need to present strong, measurable cases for investment. 

Housing Market Under Pressure

The housing sector is grappling with high construction costs and limited supply, pressures that could have ripple effects for businesses reliant on a stable workforce. Fewer than one million new dwellings are expected over the next five years, falling short of the government’s target of 1.2 million homes (Kuru, 2024). This ongoing shortfall will exacerbate housing affordability issues, increasing pressures on employee relocation, retention, and wage demands (Australian Government, 2024; Deloitte, 2024). 

Leveraging Technological Innovations for Growth

As technology rapidly evolves, businesses should assess new innovations carefully, looking to integrate those that align with their long-term goals and growth strategies. Quantum computing is one area that continues to advance, offering breakthroughs in logistics and predictive analytics. Meanwhile, sustainability-focused technologies, such as green data centres, are gaining prominence to meet ESG mandates (Marr, 2024).  

Generative AI dominates this arena, moving beyond novelty and becoming a key driver of workplace innovation. By mid-2024, 67% of Australian workers were incorporating AI tools like ChatGPT into their daily tasks (Knowles, 2024). Its adoption is elevating workflows and improving efficiency in several areas, including customer service and compliance management. However, businesses must approach it with caution, staying aware of risks like inaccurate or oversimplified outputs by training employees and implementing clear usage policies (University of South Carolina, 2024). 

Legislation Changes: Accountability and Adaptation

Australian businesses must prepare for significant legislative changes in 2025, particularly in privacy and sustainability reporting. Proactive compliance will be essential to avoid penalties and seize emerging opportunities. 

New Privacy Act Aims to Strengthen Accountability

The Privacy Act Reform Bill passed parliament in November 2024, with the government planning to start drafting legislation in 2025. This Bill enforces stricter data handling standards, enhancing individual rights and increasing penalties for non-compliance (PwC, 2024). Businesses must prioritise robust data management, updating collection, storage, and processing practices to meet these new requirements. 

Sustainability Reporting Standards for Corporates 

Starting 1 January 2025, new standards will require certain entities to include climate-related financial disclosures in their reporting, aligning with global frameworks to ensure consistency and transparency (KPMG, 2024). 

Large corporations will need to integrate climate-related risks and mitigation strategies into their annual reports, necessitating comprehensive data collection processes and alignment with internationally recognised reporting frameworks. 

For sustainability-focused businesses, these standards present significant opportunities. With demand for expertise in ESG compliance and reporting on the rise, organisations offering consultancy, technology, or tools in this space can offer support for companies navigating evolving requirements. 

A Strategic Approach to 2025 

The business environment of 2025 presents a mix of challenges and opportunities, requiring businesses to stay agile and forward-thinking. Navigating new legislation and advancements will call for a strong focus on compliance and adaptability, ensuring your organisation is well-positioned for the year ahead. 

The Kinatico team are here to help your organisation manage any compliance or workforce management complexities, ensuring you can confidently embrace what’s next.  

References 

Australian Government (2024). Mid-Year Economic and Fiscal Outlook 2024–25. https://budget.gov.au/content/myefo/index.htm  

Deloitte (2024). Deloitte Access Economics Business Outlook. https://www.deloitte.com/au/en/about/press-room/business-outlook.html  

Lee, C. (2024). Comments on housing and rental costs in Deloitte Access Economics Business Outlook. https://www.deloitte.com/au/en/about/press-room/business-outlook.html  

Kuru, C. (2024). Australia’s 1.2 million homes goal drifts further away.https://australianpropertyupdate.com.au/apu/australias-1.2-million-homes-goal-drifts-further-away  

University of South Carolina (2024). Using generative AI in research: Limitations and challenges. https://libguides.usc.edu/generative-AI/limitations 

Marr, B. (2024). 2025’s tech forecast: The consumer innovations that will matter most. Forbes. https://www.forbes.com/sites/bernardmarr/2024/11/19/2025s-tech-forecast-the-consumer-innovations-that-will-matter-most 

PwC (2024). Slow and steady: Privacy Act reform bill released. https://www.pwc.com.au/legal/publications/slow-and-steady-2004-privacy-act-reform-bill-released.html  

KPMG (2024). Australian sustainability reporting standards finalised. https://kpmg.com/au/en/home/insights/2024/09/24ru-12-australian-sustainability-reporting-standards-legislation-finalised.html  

Department of Health (2024). Once-in-a-generation aged care reforms. https://www.health.gov.au/ministers/the-hon-anika-wells-mp/media/once-in-a-generation-aged-care-reforms