May 2025

Key highlights:

  • Over the past quarter conditions for small businesses improved 0.1% - the first quarterly rise since August 2022. Over the past 12 months deteriorated by 0.9%, but now appear to have stabilized.
     
  • This modest lift reflects a shift towards re-pricing as input inflation starts to ease, with small business owners increasingly focussing on a longer-term view on required margins for their ongoing viability, cost containment and growth opportunities.
     
  • Small business owners are reviewing customer satisfaction, input costs, final prices, and ways to increase sales, product offerings and margins. This increasingly includes researching importing and exporting and the use of artificial intelligence.
     
  • Cash flow remains a concern for small businesses, but many have a sense that the worst is over with moderating inflation pressures, improving consumer sentiment and a small uptick in optimism following the Reserve Bank of Australia’s recent reductions in the target cash rate.
     
  • Queries about starting a business have increased, particularly for ideas that aim to improve social and environmental outcomes.

ASBFEO Small Business Pulse

Note: Scale starts at 75.0.
Source: ASBFEO, 2025

ASBFEO Small Business Pulse Changes

Note: The ASBFEO Small Business Pulse did not reflect a fall in 2020 as government support measures outweighed other economic impacts. As economic activity, including insolvencies, have returned to trend levels, the Pulse has reflected these shifts.

Source: ASBFEO, 2025



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