The US administration continues to signal potential shifts to its tariff frameworks, including those affecting Australia. Even for businesses with limited direct exposure to US trade, the issue has been inescapable.

Yet with interest rates easing and broader economic conditions beginning to stabilise, now is an opportune moment to look beyond the noise, reassess your position and plan for what’s next. The bigger picture is one of profound transformation with environmental imperatives and rapid technological advancements reshaping industries across Australia, redefining how we work, produce and compete.

These changes represent both risks and opportunities, and their impact will vary across sectors and businesses. But one thing is certain, no Australian business will be immune. The key lies in responding early. With the right strategy, what might otherwise be seen as a cost can instead be reframed as a catalyst for growth – and ultimately turned into a source of value rather than a drag on the bottom line.

Turning costs into profit

I recently spoke with a customer who shared a great example of forward thinking – identifying a potential challenge early and transforming it into a profitable new market.

CTS Tyre Recycling is a WA recycling and remanufacturing business, built out of an already-thriving tyre dealer who cast an eye down the line and saw an opportunity.

From passenger vehicles to the massive haul trucks used on mine sites, end-of-life tyres are an expensive item to dispose of once you’re finished with them, and that’s before considering the environmental cost and the social license involved – both issues that will only grow with time. So it seemed a natural next step for CTS Tyre Recycling to invest in a new line of operation – breaking down used tyres and transforming waste into valuable new rubber-based products for the construction, gardening, civil engineering, and other industries.

That’s turned heavy costs – and environmental liabilities – into appreciable income streams, while providing useful products for new and existing customers. It’s a win for everyone involved, including the State and Commonwealth government, which have backed the project.

Solving tomorrow’s problems, today

Of course, CTS Tyre Recycling isn’t the only company looking ahead.

GYROstream is another example of an Aussie innovator solving tomorrow’s problems, today. The company operates a music distribution business, pushing local artists out onto digital platforms, and helping them access global audiences and revenue streams.

Its success is built on understanding both the local music scene, as well as the business and operating models of the modern music industry.

And then there’s Mindflight7, which has made a business of bringing virtual reality into Australian classrooms. Teachers can use its technology to immerse students in learning experiences or virtual excursions. It provides an engaging, hands-on method of education that suits today’s cohort of learners.

Not so long ago, these companies might have seemed more like science fiction than viable businesses. But their founders had the foresight to anticipate emerging challenges, act early and steadily build resilient enterprises through years of macroeconomic turmoil.

When I think about these businesses, I’m not worried about how they’ll handle interest rate movements or higher tariffs. I’m excited about the new products and services they’ll be launching in years to come.

Numbers moving in the right direction

Looking over the data this month, there’s plenty of cause for optimism.

The numbers are moving in the right direction, and consumers and businesses are going to start feeling that.

Inflation has eased to just above 2%, with further interest rate cuts anticipated in the months ahead. Private sector employment continues to drive the majority of economic momentum and GDP is forecast to outpace 2024 growth.

Conditions will continue to improve, and that’s going to help all businesses. But, in the meantime, the innovators are going to help themselves.

5 key findings

Inflation back in its box 

Despite the small upside surprise to inflation in the quarter, we still expect inflation to settle around 2.5% in H2 2025.

Better times beckon

We expect another year of below trend growth, but for GDP growth to accelerate to around trend over 2026

Shift back to market jobs

While non-market jobs (largely government jobs, like teaching and nursing) were riding high in recent years compared to market jobs, private sector contribution is now dominating at 0.4 (versus non-market contribution at 0).

Consumers starting to relax

Australians are starting to breathe a little easier, with consumer stress dropping to its lowest point in two years. It’s pleasing to report that NAB’s Consumer Stress Index eased to a 2-year low 56.6 pts in the June quarter 2025, from an 18-month high 59.6 in the March quarter.

Spending on the up

Consumer spending rose 0.9% in June, slowing from the stronger 1.2% increase in May. Discretionary spending in particular rose 1.1% MoM, and non-discretionary spending grew 0.7% MoM. Discretionary spending growth has risen more strongly than essentials spending in each of the past three months.