As we approach the end of the 2024-25 financial year, economic data from the Australian Bureau of Statistics offers a mixed picture for Australian businesses. On one hand, inflation is cooling. On the other hand, finding skilled staff remains a significant challenge.

In April 2025, the national unemployment rate held steady at 4.1%, unchanged from the same time last year. While this may seem like good news, it’s actually a reflection of just how tight the job market remains. Businesses aren’t seeing an influx of job seekers, even as economic growth softens.

The underemployment rate has also dropped, from 6.5% to 6.0%, indicating that more workers are getting the hours they want. At the same time, the labour force participation rate has increased from 66.7% to 67.1%, close to an all-time high. That means most people who want to work already are, leaving little spare capacity in the labour market.

Recruitment Challenges Continue

These numbers confirm what many businesses already know: recruiting and retaining staff is hard right now. With minimal slack in the labour force and low unemployment, employers are competing for talent, and often having to pay more or offer more flexibility to attract it.

For small businesses, this has a direct impact on growth plans and operating costs. Labour shortages can limit output, delay expansion, and strain existing teams.

Inflation Is Easing but Spending Remains Strong

The good news is that inflation has cooled significantly. In the March 2025 quarter, consumer prices rose at an annualised rate of 2.4%, compared to 3.6% the year before. That’s a promising shift and a sign that cost pressures may be stabilising across much of the economy.

Despite the drop in inflation, household spending is holding up. While annual spending growth slowed from 4.7% to 3.5%, it’s still outpacing price increases, meaning consumers are spending more in real terms. That’s encouraging news for retail, hospitality, and service-based industries that rely on discretionary income.

Business Takeaways: Challenges and Opportunities

• Recruitment remains tough. Expect to compete harder for staff and budget accordingly.
• Wage pressure may ease slightly. Slower inflation could help temper wage growth later in 2025.
• Consumers are still spending. Households may be cautious, but they haven’t stopped buying, especially in key sectors.
• Labour costs and productivity should be reviewed. With fewer job seekers available, investing in tools, systems, or automation may be more effective than hiring.

As the financial year wraps up, now is the time to make strategic decisions around equipment, vehicles, or system upgrades, especially with the instant asset write-off scheme still available until 30 June 2025. At Peel Finance Brokers, we help small businesses in WA secure asset finance, equipment loans, and tailored funding solutions that align with your business goals and cash flow. Contact us today to explore fast, flexible finance options before the EOFY deadline.

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