As interest rates fall, growth will gain momentum. Business and consumer confidence are improving with the rate cuts delivered and expected. Activity should lift from here. We forecast the economy growing 2.2% by the end of 2025, up from flat growth in 2024. In 2026 and beyond, the economy returns to more normal levels of growth of about 2.6% per annum. The labour market, however, is expected to deteriorate further. Labour demand lags the broader economic cycle. The unemployment rate is expected to continue climbing to a peak of 5.3% in the middle of 2025. From there, it is a slow descent as the economy recovers.
2025 will be a year of two halves. The first half will be a bumpy ride with glimpses of growth. And the second half will see an uplift in activity that will spring to life into 2026.
So how will your business go? Will you survive or fall? The choice is mainly up to you. We can help you discover ways not only to survive but grow!
