Outlook 25: embracing uncertainty

The year 2025 is shaping up as a period of opportunity and adaptability, as businesses navigate evolving economic conditions and emerging growth trends.

The challenging economic environment, including geopolitical tensions, is likely to continue in 2025 — creating an uncertain landscape for businesses. But uncertainty isn’t necessarily a bad thing. 

Supply chain disruption, the impact of the continued slowdown in China,  tariffs, and inflation will all play a part in driving uncertainty. At ANZ, we see this volatility as a driver of opportunity for business, and that gives us a real sense of optimism.

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That sense of optimism is driven by several factors.

Favourable weather conditions are expected across most of Australia in 2025, which could lead to record production in the agriculture sector. This would create positive impacts throughout the supply chain. The weaker Australian dollar will continue to benefit exporters, which we expect to be particularly advantageous for cattle and grain producers.

There are signs consumer confidence is rising, with discretionary and non-discretionary retailers performing strongly in the final quarter of 2024. We have seen a similar trend in the entertainment sector, indicating a recovery in consumer spending.

ANZ has seen a notable increase in capital deployment for technology assets, into large capital expenditure programs as well as physical assets such as data centres, as businesses seek to embrace digital transformation and protect themselves and their customers from cyber risk.

Manufacturers will benefit from any interest-rate reductions in 2025, where demand is increasing, and input costs are stabilising. Here, exporters will also continue to benefit from a weaker Australian dollar.

While we did see a pick-up in merger and acquisition activity in 2024 across these industries, activity has been comparatively subdued since the pandemic period. With bidder and seller expectations finally aligning, at ANZ, we expect to see a further uptick in 2025. Businesses will continue to look for flexibility and certainty in their capital structures, preserving liquidity both for opportunistic reasons but also as a hedge against uncertainty.

Good businesses know that challenges are a constant—but with challenges come opportunities. With an improving consumer sector, accelerating digital transformation, stabilising input costs and strong agricultural prospects, those who prepare themselves strategically will be ideally placed for success.

At ANZ, we see 2025 as a year of growth and action – driven by resilience, innovation, agility and bold decision making.  

Sara McCluskey is GM, Diversified Industries, Institutional Australia at ANZ