Australian businesses are putting major investments on ice but not walking away from growth – a pattern brokers are likely to see in more selective, carefully structured funding requests.
CreditorWatch’s national Business Sentiment Survey of more than 1,000 decision makers shows 63% of leaders are postponing major investments until conditions improve, while 72% say rising costs are constraining their ability to grow.
This comes as the macro outlook points to a slow, steady recovery rather than a boom, with Westpac’s latest leading index reading indicating that 2025’s upswing is continuing, but with growth only just above trend as the recovery rolls into 2026.
Customer behaviour is adding pressure. 83% of business leaders report changes over the past year, including slower approvals, tighter budgets, longer payment terms and increased price comparison – all of which sharpen the focus on cash flow and working capital when they talk to brokers and lenders.
Workforce decisions show similar caution: 43% of leaders do not plan to hire in the next 12 months. Among those expecting to recruit, 66% favour casual or short-term contractors over permanent employees (34%), signalling a preference for flexible costs over long-term commitments.
“Business leaders are demonstrating remarkable adaptability in a challenging environment,” CreditorWatch CEO Patrick Coghlan (pictured) said. “It’s encouraging to see how many continue to feel positive about the Australian economy over the next year and how many are identifying positive indicators within their own operations. While leaders are pacing major expenditure, they’re certainly not standing still. They’re finding opportunities to innovate, expand, and deliver value for their customers even as conditions fluctuate.”
Despite the delays, investment appetite remains strong. More than 8 in ten (82%) respondents plan to invest in the coming year, with spending aimed squarely at growth drivers:
Younger businesses are especially expansion-focused. 84% of organisations less than five years old are seeking local growth opportunities, compared with 65% of businesses more than 20 years old.
The survey shows meaningful differences by industry. Financial and insurance services leaders are the most upbeat, with 89% saying they’re confident about business growth over the next 12 months. They’re also the most expansion-focused, showing the strongest local (87% vs 76% average) and international (73% vs 54% average) growth intent, and are the least likely to delay major investment (56% vs 63% average).
Construction, by contrast, is firmly in caution mode. Only 67% are optimistic about their business growth, leaders are more likely to say rising costs are affecting their growth (74% vs 72% average), and they are among the least likely to be exploring local expansion (71% vs 76% average) – all critical context for brokers with heavy exposure to building and trades clients.
State and territory results underline how uneven conditions are:
“The regional differences in this survey make it clear that a one size fits all approach won’t work,” Coghlan said. “From Queensland to Western Australia, every market has its own dynamics. Sustainable growth depends on understanding and supporting these local realities. Our most recent Business Risk Index shows that NSW, Queensland, and Victoria have been experiencing the highest business failure rates across the country – which underscores how markedly conditions differ between states.”
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