Australian business numbers surge 17% despite challenges

Australian businesses have navigated a period marked by a pandemic, inflation, and rising interest rates, yet business growth has not stalled. New research by Tapt reveals that from 2019 to 2024, the number of active businesses in Australia increased by over 17%, with Melbourne's outer suburbs and the health care sector standing out as key drivers.

The Business Growth Index Australia study, released on 16 May 2025, shows that growth is now most pronounced outside traditional central business districts, with "the sharpest rise in business activity… occurring in outer suburbs and regional hubs," according to Tapt's analysis of Australian Bureau of Statistics (ABS) data.

Melton leads national business growth

Among local government areas (LGAs), Melton, located 45 minutes from Melbourne, has experienced the fastest business growth in Australia, with an 86.5% increase in registered businesses over the past five years, averaging 13.5% growth annually. The trend extends to other outer Melbourne LGAs, with Wyndham (up 80.6%), Casey (53.0%), and Hume (50.2%) all featuring among the nation's top five growth areas. Seven of the top ten fastest-growing LGAs are in Victoria.

Outside Victoria, Camden in New South Wales recorded a 50.2% rise, followed by Blacktown at 39.6%. In Western Australia, Kwinana saw business numbers climb by 38.5%.

The report notes: "Seven of the top ten areas were located in Victoria, highlighting the rapid pace of business growth in the state. Outside Victoria, Camden in New South Wales led the charge with a 50.2% rise, while Blacktown also made the top 10."

Not all areas have grown. The island of Hinchinbrook in Queensland recorded the slowest business growth, with an average decline of 0.84% per year and a total fall of 4.2% in business numbers since 2019.

Health care sector sees biggest expansion

Business growth has not been evenly spread across all industries. The Health Care and Social Assistance sector led the way, increasing by 41.2% between 2019 and 2024. The report attributes this rise to "the rising demand for healthcare services amid an ageing population and the COVID-19 pandemic."

Other sectors seeing significant growth include Administrative and Support Services (up 27.0%), Arts and Recreation Services (26.9%), Other Services (26.5%), and Education and Training (25.5%).

By contrast, some industries have faced headwinds. The Agriculture, Forestry, and Fishing sector saw a slight decline of 0.7% over the five-year period, "as challenges like climate change and labour shortages affected productivity," according to the research. Wholesale Trade posted minimal growth, up just 2.9%.

Growth by state and business size

The Australian Capital Territory recorded the highest growth rate among states and territories, followed closely by Victoria. The report points to "a significant influx of new businesses and steady growth off the back of an already large business base" in Victoria, noting the biggest spike occurred during 2021–2022, when COVID-19 restrictions were easing.

Much of the overall growth has been driven by non-employing businesses such as sole traders, freelancers, and contractors. These expanded rapidly in the ACT (up 24.9%), Victoria (25.8%), Tasmania (18.8%), and New South Wales (18.4%). Medium-sized businesses also grew, particularly in Victoria (19.7%), Western Australia (24.4%), and Queensland (24.7%).

Business shift to the suburbs and regions

Elon Datt, Founder and CEO at Tapt, commented on the findings:

"We're seeing a real shift in where business growth is happening across Australia — and it's not just confined to the big CBDs anymore. Our analysis shows that outer suburban areas and regional hubs are emerging as powerful engines of growth, driven by a combination of lifestyle appeal, lower overheads, and changing work habits."

Datt continued:

"As more people seek flexibility, affordability, and a better work-life balance, they're choosing to build their businesses closer to home — and that's changing the business landscape in a big way.

"For anyone thinking about starting a business, now is a great time to look beyond the traditional hotspots. These emerging areas offer strong local demand, growing populations, and often less competition. Importantly, they're also developing into vibrant local business communities and getting involved in those networks can be a huge advantage."

The research, based on official ABS datasets, filtered for LGAs averaging over 1,000 businesses from 2019 to 2024, and categorised business size by employment numbers. The study excluded general government and non-profit institutions, focusing on market sector activity.

Overall, the findings highlight a new phase in Australian business development, with growth radiating outwards from city centres to suburban and regional areas, particularly in health care and personal services, and led by both new solo ventures and established enterprises alike.