Navigating Challenges and Opportunities for Businesses in 2025

As we approach the halfway point of 2025, the economy and the general business landscape are no less complicated than they were in the new year. Global trade dynamics, domestic policy shifts, and evolving consumer behaviours are all playing their part.

Here we’ll be providing insights into the current state of UK businesses, using recent data from the Office for National Statistics to highlight areas of challenge and opportunity.

Trade Dynamics and Cost Pressures

According to the statistics available, exporting businesses are fairly evenly split between those who have seen an increase and those who have seen a decrease in exports over 2024-2025. A large chunk also experienced an increase in the costs of exporting, regardless of whether activity had increased:

• 19% of UK businesses with 10 or more employees that exported goods or services between April 24-25 experienced an increase in exports in March 2025 when compared to March 2024.

• 23% however, saw a decline.

• 36% of exporting businesses also reported higher export costs in March 2025 than in the previous year.

On the importing side, costs are apparently soaring, with similar growth over the past year:

• 18% of importing businesses noted an increase in imports in March 2025 compared to the previous year.

• 40% of these importers faced higher import costs.

The rising costs are attributed to global supply chain disruptions and recent trade policy changes, including new tariffs imposed by the United States.

Business Operations and Resilience

Despite the challenges of rising import and export costs, businesses are apparently remaining steadfast. At the time of data collection (April 2025), 95% of businesses reported being operational, with 86% fully trading and 8% partially trading.

Only 3% had temporarily paused trading, and 2% had permanently ceased operations. This stability indicates a degree of resilience in the face of economic challenges.

Labour Market Trends

The UK labour market appears to be suffering, with 33,000 employees lost in April 2025 alone (following a drop of 47,000 in March). Unemployment also rose to 4.5%, as widely predicted.

Job vacancies also decreased by 42,000 in the three months leading up to April 2025, but average weekly earnings rose by 5.6% in the same period. This increase is encouraging but actually falls slightly below expectations. The figures mark the slowest growth since November 2024.

Consumer Behaviour and Retail Activity

Consumer spending patterns give us a slightly more hopeful picture. The easing of inflation and increase in earnings may be to thank for this uptick:

• Retail footfall increased by 6% in the week leading up to 4 May 2025 compared to the previous week

• High street footfall rose by 10% in the same period.

Implications for Recruitment

The figures show both positive and worrying change, and the implications for the recruitment sector are no different. With more job-hunters on the market, we may have more candidates available, but attracting the perfect talent for our clients may require additional value and compensation to be clearly advertised.

Targeted recruitment strategies will become essential; using transparent job descriptions and industry-specific techniques as well as direct head hunting. A continued lean towards flexible and home-working will mean that hybrid and remote positions will likely remain popular, and necessary for effective retention.

Strategic Considerations

Businesses and recruiters should consider the following strategies to stay ahead of the current market:

• Up-skilling and re-skilling: Investing in employee development can address skill shortages and improve retention.

  
  

• Data-driven recruitment: Leveraging the data available can enhance recruitment processes - identify emerging workforce trends and playing to the current market.

  
  

• Employer branding: A strong employer brand can differentiate organisations in a competitive job market, attracting quality candidates and improving retention rates.

For a no-pressure chat to discuss your needs in this tricky market, book a call with Reset today.