Queensland business confidence crash as reopening boost falls flat

Compounding impacts of state border reopening, labour shortages, supply chain disruptions and low consumer spending means Queensland businesses' confidence in the future of the state and national economies has crashed.  

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Key facts  

• 12-month outlook for the Queensland economy recorded a fall in confidence of 38.3 (down 16.9 points) in December 2021 quarter. This represents the second largest fall in confidence since COVID began in the March quarter 2020 and lower than the 10-year average.  

• On average businesses are yet to fully recover, reporting business operating conditions at 84.9% of pre-COVID conditions. 

• 41% of businesses are less confident in reaching their business goals in 2022, a increase from 39% of businesses in the September quarter 2021.   

• The profitability index fell another 4.5 points from 34.8 in the December quarter to 30.3, following a 5.9 point reduction in the September quarter and a 4.3 point reduction in the June quarter. 

Released Tuesday, 15th of February, results from CCIQ’s December quarter Pulse Survey of business conditions, supported by Mitsubishi Motors Australia Ltd, reports poor business outlook confidence is reflective of the compounding impact of labour shortages, supply chain disruption and considerably lower consumer spend. 

The 12-month outlook for Queensland and national economies, general business conditions, sales and revenue, capital expenditure, employment levels and profitability all fell in the December quarter, while operating costs remained steady and labour costs increased in the same period.  

CCIQ Policy and Advocacy General Manager Amanda Rohan said businesses were operating at less than 85% of their pre-COVID conditions as result of low consumer confidence, COVID in the workplace and supply chain disruptions coinciding with the December state border reopening. 

“Businesses told us level of demand and economic activity, retaining and recruiting employees and political and economic instability were their most significant constraints on business growth,” Ms Rohan said.  

“Two in five businesses are not expecting to meet their 12-month goals in 2022 while many expect profitability to fall again in the March quarter.  

“We’re seeing a perfect storm of uncertainty combined with poor consumer confidence and labour market shortages clashing to create a difficult business environment in Queensland.” 

Business feedback indicated COVID-19 impacts were more noticeable in regional Queensland in the December quarter, specifically due to rising insurance, fuel and other business input costs.  

“Businesses were calling on the State Government consistently throughout 2021 to provide clear reopening and economic recovery planning as uncertainty would ultimately end up costing Queensland businesses,” Ms Rohan said.  

“We called for access to Rapid Antigen Testing to be freely and widely available for business, a joint state and federal directly-targeted support package for businesses most impacted and clarity on what the state’s 90% vaccination milestone meant for business rules and mandates.  

“Businesses told us without those commitments, they would struggle to re-open, stay open and be viable long-term. 

“Now we’re seeing the impact with the majority of Queensland businesses increasingly concerned about their business viability.”