Sheraan Underwood, associate director and lead author of the report, highlighted that operating costs continue to rise. Labour costs are above their long-term average and are expected to remain elevated through 2025. Additionally, non-labour expenses, including energy and insurance, are increasing, further squeezing profit margins.
This challenging environment of slowing demand and escalating costs is beginning to erode business profits. Companies are facing difficult decisions regarding investment and expansion, which could have broader implications for the Australian economy.
For individuals, this trend may translate into cautious business practices, potential slowdowns in hiring, and restrained wage growth. Staying informed about these developments can help Australians make proactive financial decisions in response to the evolving economic landscape.
Published: Monday 8th December, 2025
Please Note: If this information affects you or is relevant to your circumstances, seek advice from a licensed professional.
