Queensland businesses are showing rising levels of confidence despite reporting weak profits and tough operating conditions.
The Business Chamber Queensland’s Pulse Report for December 2024, released today, showed business were more confident about the economy following the change of government in the 2024 State Election.
This was despite the business operating environment being described as “crippling”.
“Businesses cited both elections (State and Federal) as opportunities for positive business and economic policy reform and a reason for increased economic confidence over the next 12 months,” the Chamber said.
“Confidence was also fuelled by an expectation for further interest rate softening.”
The economic confidence levels in December were at a two-year high even though operating conditions in the December quarter were unexpectedly weak.
Business Chamber Queensland CEO Heidi Cooper said the persistently challenging business operating environment in Queensland was further challenged during the recent disaster season.
“The data shows while forward economic confidence was strengthening, actual business conditions including sales and revenue, profitability and the ability to run a business didn’t match confidence,” Ms Cooper said.
“In fact, in the December quarter we saw consistently weak profitability which returned to its lowest levels since the peak of the COVID economic crisis, while three in four businesses reported yet another increase in their operating costs.”
Ms Cooper said businesses increasingly expected foreign influence would impact their business this year.
“International politics, tariff wars and the Australian dollar depreciation had material and serious influence on business performance and expectations,” she said.
“While businesses are fully aware of the local and Queensland factors, they are now also expecting policies from Canberra and overseas to impact their business performance in the future.
“Businesses tell us the current conditions are crippling.”
Business Chamber Queensland’s Pulse Survey of business conditions has been measuring Queensland business confidence and expectations for more than 30 years.
Key finding from the pulse report include:
- General business conditions declined for the second consecutive quarter but are expected to improve.
- Sales revenue declined unexpectedly and is now below the 10-year average but above this time last year. High cost of living including mortgage repayments and higher borrowing costs for business projects and investment have continued to weigh down business to consumer and business to business sales.
- Operating costs during the December quarter were elevated. Three in four businesses recorded an increase in their operating costs.
- Employment levels continued the trend set in early 2024 of moderate decline.
- Insurance increased to the highest constraint on business growth, up from the fourth highest constraint last quarter.
The full report is available through the Business Chamber website.
