The State Chamber of Commerce is calling on the Queensland Government to deliver a pro-growth, pro-productivity 2026–27 State Budget, warning sustained high costs, sticky inflation and workforce pressures are impacting confidence and limiting businesses’ ability to invest and expand.
New data from Business Chamber Queensland shows business confidence in Queensland fell for the second consecutive quarter as sustained inflationary pressures and poor operating conditions continued to impact businesses’ bottom lines.
The Chamber’s Pulse Report of business conditions for the December quarter, released today, shows alongside a drop in confidence, general business conditions, profits, investments and employment also declined amid widespread concern about cost of living, skilled labour shortages and interest rates.
Business Chamber Queensland CEO Heidi Cooper said 2026 would be a pivotal year for Queensland’s economy, but businesses entered it under mounting strain.
“Many businesses are operating in an environment of persistent cost increases, regulatory complexity and workforce shortages,” Ms Cooper said
“Across every industry and region in Queensland, businesses are telling us the same story; operating costs are rising faster than revenues, productivity growth is constrained, and skills shortages are severe.
“It’s a perfect storm that’s putting businesses under pressure at a time when they should be scaling, investing and planning for future opportunities.
“And we know these pressures are compounded for small businesses who can’t keep taking these hits.”
The data shows sales revenue declined for the second consecutive quarter and is below the 10-year average while profitability took another step backwards, reflecting a decline in sales and revenue and continuing high operational and labour costs.
Inflation and cost of living are expected to reduce consumer spending and household disposable income, making customers cautious and reducing demand for business.
Ms Cooper said the 2026-27 State Budget was a critical chance for the government to improve the business environment and give businesses the confidence to invest, hire and grow.
“State-based factors including the pipeline of major events and record investment in infrastructure continue to bolster Queensland’s outlook,” Ms Cooper said.
“Businesses want to be part of Queensland’s growth story. They want to capitalise on supply chain opportunities, expand into new markets, and invest in technology.
“But they need a commitment from government to improve the regulatory environment, deal with increasing costs and provide support for them to be productive and competitive.
“Without targeted action in this Budget, those pressures will continue to impact on growth and investment.”
Business Chamber Queensland’s State Budget submission, informed by more than 600 businesses employing over 35,000 Queenslanders and extensive consultation with regional Chambers, contains more than 70 recommendations aimed at strengthening the state’s economic foundations.
“Our message to Government is clear: back Queensland businesses, and they will back Queensland,” Ms Cooper said.
“A strong private sector is essential to funding the services and infrastructure our communities rely on. This Budget must enable an environment where every business has the opportunity to thrive.”
The Chamber’s full 2026–27 State Budget submission is available here.
Download the December Quarter Pulse Report here.
Key data
Business confidence dips further: Business confidence in the Queensland economy (12‑month outlook) fell for the second consecutive quarter to 49.7, however is still well above this time last year (42.0).
Interest rates: The release of CPI data ahead of the RBA’s interest rate increase impacted confidence. The index before the release was 52.3, decreasing to 43.3 in the aftermath.
Inflation and cost of living: Are expected to reduce consumer spending and household disposable income. Pressure is making customers cautious, leading to reduced demand for business.
General business conditions: Deteriorated by another 2.1 points to 45.6, reflecting weaker sales and profitability.
Sales revenue: Declined for the second consecutive quarter to 45.4, slipping below the 10-year average (48.3). This is unusual for the December quarter, which is normally a robust trading period.
Profitability: Took another step backwards, reflecting a decline in sales and revenue and continuing high business operational and labour costs.
Top business constraints: Retaining and recruiting suitably qualified employees (67.5) remains the largest constraint on business, followed by direct wage costs (62.7) and the level of business taxes and government charges (61.2).
A business perspective
Maryborough business CQ Building Supplies Managing Director and Owner Paul Spicer said demand in his industry remains high, but workforce challenges limit their capacity to grow.
“Housing demand is strong in Central and South East Queensland, fueled by interstate migration, regional growth and the need for more retirement villages,” said Paul.
“We’ve been in business for 20-odd years, in which time the workforce has become a lot more transient and staff retention poses a big challenge, particularly in the regions.”
Paul says increased development and state-wide infrastructure demand will continue to drive prices up as businesses compete for the same talent pool.
To enable growth and meet demand, the business has made investments in technology and taken an innovative approach to building a skilled pipeline of workers across the region.
“We’re doing everything we can to innovate and position ourselves as an attractive employer, including switching to a four-day work week in the factories,” said Paul.
“Our new factories are state-of-the-art, and we’ve incorporated the latest robotic systems into our manufacturing process, but we still need more workers.
“Over the past few months, we’ve been working with the National Timber and Hardware Association (NTHA) to engage school-based trainees who can gain valuable experience, build their skills and ultimately join the local workforce when they finish school.”
Paul says establishing the program has taken a considerable amount of time and effort, and additional support sought from the Queensland Government is critical to its sustainability.
“We wanted start this program last year but part of the delay was caused by red tape and paperwork to get the certificates we needed for funding.
“Both the State and Federal Governments need to do more to understand the needs of the building industry, provide more funding, reduce red tape around training programs, and target skilled migration for key trades within the building industry.”
