2025: The Year of the Snake

As the world prepares to welcome in Chinese New Year this year - January 29th 2025 will mark the arrival of the year of the Snake. Urban Economics returns to our tradition of highlighting parallels real or imagined between the Chinese New Year’s animal of the year and its perceived traits, to the year’s economic outlook ahead.

This new year follows a tumultuous and fiery year of the Dragon in 2024 where many found themselves grappling with the uphill battle of a skyrocketing cost of living. While the Dragon symbolised strength and power, this was dimmed by the reality of rising inflation and interest rates, a paralysed property market and overall economic uncertainty.

As we transition into the year of the Snake, the focus shifts to resilience, growth, ambition and strategic adaptation, offering the chance to build on lessons learned in navigating a more stable road forward, with key economic indicators for 2025:

• Nominal wage growth remains steady at 3.5 per cent and as conditions in the labour market ease, wages growth should continue to remain moderate, above its 10-year pre-pandemic average (2.7 per cent). Upcoming administered wage decisions are likely to support overall wages growth.
• While growth in business investment is forecast to moderate to 1? per cent in 2024–25, and 2 per cent in 2025–26, it is forecast to remain at highs not recorded since the 2010s. Business investment in Australia is expected to remain at record levels, boosting economic activity.
• Dwelling investment was stifled in 2023-24 by increased construction and financing costs and labour constraints, however with expected easing of monetary policy and construction costs in the coming year, investment in dwellings is forecasted to grow 1 per cent in 2024-25 and at 5 per cent come 2025-26.
• Although improving slightly over the course of 2024, the Westpac-Melbourne Institute Consumer Index dipped 2% to 92.8 in December as consumers remain pessimistic approaching the new year.
• ?Unemployment rate is anticipated to rise to 4? per cent by June 2025, while participation rate remains almost at its peak with more cohorts such as women and younger people entering the labour force, who may have faced barriers previously.
• Global uncertainty fuelled by superpower trade wars between China and US and geopolitical tensions around the world will continue to affect the Australian economy, with increasing concerns surrounding the potential for commodity price shocks (such as for oil).

At a state-level, there are a few notable symbolic representations for the Year of the Snake within Queensland – and we’re not just talking about the Brisbane River, or as its coincidentally nicknamed, ‘the Brown Snake!’ This year poses many changes for Queensland – just as the snake sheds its skin, the state faces its first transition to a new government since 2015, making way for new leadership, policies and approaches.

The Year of the Snake also signifies boldness, determination and transformation – a few vital traits reflecting Queensland’s preparation for the much-anticipated 2032 Olympic Games. The scheduled100-day review for the Games venues this year marks a pivotal point in its planning and execution, providing opportunity for Brisbane City to undergo strategic transformation, reinventing itself on the world stage.

Additionally, recent delivery of the Bruce Highway Upgrade Program as at September 2024 included some 73km of highway duplication, 130 new bridges, over 60 new and upgraded rest areas and ~580km of roadside safety barriers. The program aims to further strengthen and enhance the vital connectivity provided by the ‘central snake of transport’ for Queensland.

Finally, the renewable energy sector is rapidly expanding across Queensland, which mirror renewal and growth as accompanying themes for the year. Queensland’s energy production landscape is evolving, with the Gladstone region effectively becoming the state’s hub for hydrogen production as well as various existing and upcoming wind/solar projects cropping up from Darling Downs Southeast through to the Far North. The industry is poised to contribute to the various local economies of these project areas, increasing employment opportunities and ultimately attracting investment with flow on effects for housing, local amenity and overall economic growth.

On the other hand, and typical of the snake, we may be looking to bite off more than we can swallow with over 42GW of proposed wind projects alone in the State, a pipeline requiring ~10,000 turbines and associated transmission infrastructure. The Year of the Snake is also a federal election year, one for which the future energy landscape of the nation (wind, solar, coal, gas, hydro, batteries and…. nuclear) is anticipated to be as hotly a debated issue as the cost of living and produce dollar figures that would surely dwarf the Olympics and Bruce Highway expenditures. But then, maybe it’s a legless lizard.

All in all, a mix of highs, lows and some uncertainties are forecasted for the year ahead. We can look to the preying habits of the snake as a sign of ambition and rely on its adaptive and transformative nature to navigate through the shifting economic landscape.

Here’s to embra(ssss)cing the new year!