August 2025 Small Business Pulse – Cautious optimism amid modest improvements in small business conditions

August 2025

Key highlights:

• Conditions for small businesses continue to improve. The ASBFEO Small Business Pulse increased by 0.6% in August 2025 – the second consecutive quarterly increase. Over the past 12 months it has increased 0.2%.
• This increase reflects cautious optimism with a shift in small business owner focus from immediate survival concerns towards durability, growth, innovation and productivity opportunities from technology and artificial intelligence and a continued focus on cost containment and protecting long-term margins.
• Small business owners are increasingly seeking to diversify their business, particularly those in industries that have faced tough conditions for a prolonged period. These include industries that rely on discretionary spending and those that rely on favourable weather conditions.
• Challenges remain in the operating environment. There has been a shift from concern about staffing availability to costs. Concerns about regulatory requirements have increased across a wide range of areas including employer responsibilities and superannuation, insurance and business registration and licensing requirements.

ASBFEO Small Business Pulse

^{Note: Scale starts at 75.0.}

^{Source: ASBFEO, 2025}