Business conditions, sentiment and expectations in Queensland are showing no signs of improvement with confidence in the future of the state and national economies weak ahead of the traditionally busy Christmas period, new Business Chamber Queensland data shows.
Out today, Business Chamber Queensland’s Pulse Survey of business conditions for the September 2023 quarter shows day-to-day business challenges combined with macroeconomic issues continue to impact forward economic confidence, stabilising at low business as normal levels.
At the same time, general business conditions continued their downward trend and returned to levels not seen since periods of COVID business restrictions in 2021.
Business Chamber Queensland CEO Heidi Cooper said businesses traditionally were optimistic leading into Christmas and holiday periods but sustained day-to-day business pressures were putting pressure on future economic confidence.
While improving slightly during the September quarter, confidence has stabilised at weak levels.
Tourism regions like Far North Queensland, Brisbane and Sunshine and Gold Coasts recorded the highest confidence levels, however still at weak levels.
“We are increasingly seeing a stretched and stressed business community in Queensland,” Ms Cooper said.
“Businesses continue to a face a really challenging and restrictive set of compounding challenges – high costs, workforce challenges, weak sales and revenue and declining profitability.
“For close to two years now businesses are telling us workforce challenges, specifically the ability to attract and retain suitably qualified employees, is the most significant constraint on business growth, while direct wage costs are the second highest constraint.
“Businesses also expect level of demand and economic activity will impact their future growth, alongside insurance premium costs.”
Two in five businesses indicated their sales declined during the September quarter while one in three businesses expected general conditions to weaken further in the December quarter.
“Overall, Queensland business revenue is down and costs are up. Declining revenue and high operating costs are putting pressure on business profitability. Close to 40% of businesses expected their sales revenue to weaken further in the December quarter,” Ms Cooper said.
“September quarter Pulse data shows an interesting scenario in which average selling prices are stable at moderate levels, despite high costs and weak profitability. This indicates many businesses are taking a hit to profitability without passing the entire cost increase onto the consumer.
“Tightening household and corporate budgets resulted in weaker sales and revenue which is concurrent with high operating and labour costs. Both operating and labour costs were stable near record levels reached in the June quarter.
“Businesses are telling us it’s tough to be in business. We have direct business insight and regularly engage with the state’s business community to understand business sentiment, conditions and expectations and our Pulse data is among the most trusted, authoritative and timely snapshot of the state’s business community.
“It’s critical businesses see some relief from these challenging conditions in 2024 and beyond, to secure their day-to-day viability and long-term competitive sustainability.”