SYDNEY, 20 October 2025 – Global professional services firm Alvarez & Marsal (A&M) in collaboration with the Turnaround Management Association (TMA) Australia, has released its annual Turnaround Survey, revealing a complex and challenging landscape for Australian businesses. While cautious optimism is emerging, the survey underscores that the road to recovery is fraught with significant challenges, with many sectors still grappling with the lingering effects of economic turbulence.

The survey, which gathered insights from over 180 turnaround, restructuring, and insolvency professionals, paints a picture of a market in transition. While recession fears have eased, businesses are far from out of the woods, as inflation, debt, and sector-specific pressures continue to weigh heavily on the economy.

The Lingering Storm: Inflation and Debt Twin Challenges 

Despite improving macroeconomic indicators, businesses are struggling to overcome significant headwinds. Input cost inflation and overleveraged capital structures remain the most pressing challenges, followed closely by wage inflation, cash flow management and supply chain disruptions.

Construction and Healthcare Sectors Under Siege

Construction: A staggering 86% of respondents anticipate more significant stress in the sector, driven by fixed-price contracts, rising input costs, and workforce shortages. Smaller construction firms are particularly vulnerable, with insolvencies on the rise.

Healthcare: Ranked as the second-most stressed sector, 76% of respondents foresee high or very high stress levels. Financial pressures, operational inefficiencies, and challenges in the public-private hospital model are straining the industry, with potential ripple effects on patient care.

Distressed Investing: Opportunities on the Rise

With businesses grappling with input cost inflation, over-leverage, and cash flow pressures, the industry believes the landscape for distressed investing will continue to evolve. Rising levels of private capital in global markets have created fertile ground for opportunities, particularly to reset overleveraged capital structures.

A majority (57%) of respondents expect a rise in the number of stressed investment opportunities in the next 12 months.

A&M’s Call to Action: The Playbook for Survival

As businesses navigate this challenging environment, A&M emphasises the importance of proactive measures to build resilience and address financial and operational pressures. Key recommendations include:

• Strengthening cash management and working capital strategies.

• Exploring alternative financing options to address overleveraged capital structures.

• Investing in operational efficiencies and digital transformation to mitigate rising costs.

These actions are critical for businesses to not only survive but thrive in a volatile environment. As organisations take steps to strengthen their financial and operational foundations, they can better position themselves to navigate uncertainty and seize emerging opportunities.

"Proactive measures like these are essential for businesses to build resilience and adaptability in today’s challenging environment," said Jason Tracy, National Restructuring & Turnaround Leader Managing Director at A&M. "While the road to recovery is not without obstacles, those that address financial and operational pressures head-on will emerge stronger and more competitive in the long term."

About the Survey

The 2025 Turnaround Survey was conducted in July and August 2025, gathering insights from over 180 professionals in the turnaround, restructuring, and insolvency space. The survey explored topics such as economic outlook, industry stressors, and business responses to challenges.

About Alvarez & Marsal

Founded in 1983, Alvarez & Marsal is a leading global professional services firm known for its operational heritage and commitment to delivering results. A&M provides advisory, performance improvement, and turnaround management services to corporates, investors, and government bodies. With deep energy expertise across Australia, the US and Europe, A&M partners with clients to navigate complex market challenges and unlock value through practical, strategic transformation.

For more information, visit: www.alvarezandmarsal.com.au