So far, 2025 appears to be bringing faster, more pronounced changes to Australia’s SMEs. That’s due to economic uncertainty, inflation pressures, accelerated digital transformation, workforce challenges, changing consumer and B2B expectations, and regulatory shifts.
A key indicator of business growth is requests for insurance policies. They offer useful insights into where new businesses are emerging and which sectors are losing ground.
Which Small Business Sectors Are Booming?
Some of Australia’s fastest-growing small business sectors are responding to social, economic, and demographic changes. Insurance data shows these industries had the most significant percentage increases in policy requests over the past 12 months:
Societies, associations, and groups (36.2%): Community engagement is rising, with more local and charitable groups forming and requiring insurance cover
Tax services (34.6%): Economic uncertainty has increased demand for financial expertise, with businesses and individuals seeking more professional tax advice
Property (34.3%): Interest in both residential and commercial property is strong, driving growth in real estate and property-related services
Complementary therapies (32.7%): Alternative health services, such as massage therapy and naturopathy, continue to attract clients looking for holistic wellness solutions
General services (31.8%): A broad category ranging from IT support to personal services, reflecting the demand for outsourced expertise
Many of these growing sectors are driven by evolving consumer behaviours, a greater focus on financial security, and a higher inclination for alternative health and wellness options. Keep in mind, a growing sector is not the same as a growth sector. Growing sectors are expanding, typically due to short-term trends, and may not have a long-term track record of stable growth, unlike growth sectors.
Industries Seeing High Volume Growth
Beyond the fastest-growing sectors, several industries have seen a surge in new business registrations:
Aged and disability care: Demand has soared due to the National Disability Insurance Scheme (NDIS)
Cleaning and gardening: More Aussies are outsourcing household maintenance, with strong demand from both private clients and government-funded home care services
Post-construction services: The ongoing property boom has increased demand for services such as site clean-ups, plumbing, and electrical work
Allied health: Preventative healthcare popularity has driven expansion in services like physiotherapy, occupational therapy, and mental health support
Business consulting: More small businesses are turning to consultants for strategic guidance, particularly in financial management and digital transformation
Small Business Sectors Facing a Slowdown
While some industries are thriving, others are experiencing a decline. A drop in insurance policy requests suggests that fewer new businesses are entering these sectors:
Surveying (-15.7%): Slower infrastructure spending and competition from larger firms have impacted demand
Data processing, web hosting, and electronic information storage (-15.4%): Automation and the dominance of big cloud providers are squeezing out smaller players
General retail (-9.8%): The ongoing shift to e-commerce has made it harder for traditional brick-and-mortar stores
Tertiary education (-6.9%): Changing education models, along with declining international student numbers, have reduced demand
Wood and paper manufacturing (-6.7%): Sustainability concerns and changes in consumer behaviour have contributed to the decline
Managing Business Risk in a Changing Economy
As small businesses navigate these trends, managing risk has never been more important. Each sector faces unique challenges, and the right insurance coverage can provide protection against unexpected setbacks.
Typical types of coverage to consider include:
- General liability insurance: Crucial for companies where visitors and customers attend the business premises
- Workers compensation: Mandated for any business that employs staff
- Management Liability: Protects businesses, directors, and officers from financial exposures arising from decisions and responsibilities
- Professional indemnity insurance: Particularly relevant for tax professionals, consultants, and allied health providers
- Property insurance: Essential for businesses in property management, cleaning, and construction services
- Cyber insurance: A growing necessity for any business handling customers’ personal information
- Business interruption insurance: Helps cover lost income in the event of an unexpected disruption
The business landscape is changing, but with the right insights and protections in place, you can take advantage of emerging opportunities while safeguarding against risks.
If you’d like to know more about protecting your business in Australia’s changing economic landscape CLICK HERE, or contact us today.