Business confidence in the Queensland economy has slumped by the biggest margin in 20 years of data, according to the state’s peak business body.

Business Chamber Queensland’s Pulse Report for the March quarter, released today, shows confidence has plummeted below levels recorded in 2008 during the height of the Global Financial Crisis.

Confidence has now fallen for the third straight quarter, and businesses expect it to deteriorate further.

A combination of rising fuel costs, supply chain insecurity, cost of living pressures, inflation, restrictive regulatory burden, low productivity and higher interest rates has put businesses under intense pressure.

Concerns over political and economic stability are at an all-time high, moving from ninth to the top concern amid disrupted energy trade and shifting geopolitical and domestic pressures.

Business Chamber Queensland CEO Heidi Cooper said businesses were facing enormous strain with general business conditions, sales, profits, investment and employment all taking a significant hit.

“The high cost and global shortage of fuel and oil by-products and the subsequent supply chain cost flow-ons emerged as the most prominent concern, acting as a massive burden on every industry due to freight and transportation costs,” Ms Cooper said.

At the same time, labour and other costs have returned to high levels following big increases during the quarter.

Businesses also reported 95% felt the impact of the fuel crisis with at least 60% reporting higher input costs, increased freight and transport costs, reduced operating hours, and cashflow pressure.

Ms Cooper said these headwinds, combined with high interest rates, stubborn inflation, energy and insurance cost increases, flat productivity, regulatory compliance pressures and wage increases meant Queensland businesses were looking for signs of encouragement in an uncertain and highly challenging operating environment.

“This uncertainty and compounding pressure is making it extremely difficult to invest, hire and grow,” she said.

“Queensland businesses can’t keep taking hits and this perfect storm of conditions is putting more and more pressure on an already stretched and stressed business community.”

Ms Cooper said the 2026-27 State Budget represented a pivotal opportunity to strengthen the Queensland business environment and restore confidence.

Payroll tax relief is at the top of Business Chamber Queensland’s 70-plus recommendations for the State Government’s budget on June 23, alongside calls to deliver much-needed infrastructure while cutting red tape and providing direct capability-building support to businesses.

In its budget submission, the Chamber estimates lifting the payroll tax threshold from $1.3 million to $1.5 million would benefit more than half a million businesses and reduce the handbrake on growth.

Among the recommendations are calls for commitments on priority projects from the Bruce Highway to key energy infrastructure, in addition to reducing regulatory burdens that inhibit productivity and place significant cost on every business in Queensland.

The key objective of the Chamber’s budget submission is to encourage policy and budget initiatives that lifts productivity and profitability and sets Queensland businesses up to take advantage of all the opportunities ahead.

“Our message to Government is clear: Queensland businesses are the backbone of our economy and the heart of our communities. Back Queensland businesses, and they will back Queensland.”

Business Chamber Queensland’s State Budget submission, informed by data from 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 and enabling businesses to weather the current challenges and look to the future.

The Chamber’s full 2026–27 State Budget submission is available here.

To download the March Quarter Pulse Report, click here.

Key data from Business Chamber Queensland’s March Quarter Pulse Report:

12-month outlook deteriorates sharply: Business confidence in the Queensland economy (12-month outlook) recorded the largest drop in 20 years, failing below GFC-era levels.

Interest rates: A third interest rate rise since the previous Pulse survey is being cited as a major constraint on confidence and growth, delaying hiring decisions, and capital investments.

Inflation and cost of living: Consumers are becoming more cautious, particularly in retail, tourism and discretionary expenditure. Many respondents said inflation felt uncontrolled and would continue to rise, risking higher borrowing costs due to government spending and global price pressures.

General business conditions: Deteriorated by another 9 points to 36.6, reflecting weaker sales and profitability.

Sales and revenue: Fell from 45.4 the previous quarter to 36.8; businesses expect further declines in the June quarter.

Profitability: Slipped from 30.9 to 26.2, reflecting weaker sales and revenue.

Top business constraints:

• Political and economic stability: Fuel and oil by-products shortages/costs became the standout concern, up 11.5% on the previous quarter.

• Transport cost and infrastructure: Concerns rose 16.6% as the fuel crisis flows through to transport costs.

Business story – Trevor-Roberts

South-east Queensland business owner Edwin Trevor-Roberts says businesses across the state are grappling with a sharp drop in confidence as a wave of overlapping challenges creates operational strain.

His business, Trevor-Roberts has provided career-transition and leadership development services to businesses across Queensland for 32 years but also throughout Australia. He said the current business environment was overwhelming, with companies facing several competing factors all at once.

“There are a lot of significant changes happening now that businesses are really struggling with,” Dr Trevor-Roberts said.

“It’s overwhelming and this is translating as a lack of confidence because there is uncertainty about how things will pan out and how each individual business will be able to respond to these challenges,” he said.

Dr Trevor-Roberts said workforce issues remain one of the most pressing concerns with businesses struggling to find workers with the right skills.

“This is particularly acute in industries such as health, aged care and disability services, where shortages are chronic,” he said. “The situation is even more difficult in regional and remote areas, where attracting staff is further hindered by housing shortages and rising living costs.”

Alongside workplace pressures, he said the growing compliance and administrative burden was consuming significant time and resources.

“New requirements- such as tax and superannuation changes- are manageable on their own, but overwhelming when they are all introduced at the same time,” he said.

Financial pressures are also intensifying with rising input costs, wage growth and limits on price increases squeezing margins.

“People talk a lot about cost-of-living pressures, but there’s also cost of doing business pressures.” he said.

He added that people in middle leadership roles were among the most affected as they were dealing directly with staff who are increasingly feeling unsafe and uncertain.

“There’s very little support and not enough being done for those leaders, both in building their capability and in supporting their mental health,” Dr Trevor-Roberts said. “They are under significant pressure to create environments where people feel safe while also delivering on performance expectations.”

Despite the challenges, there are signs of resilience. Among his customers, employment levels remain relatively strong, and some organisations are finding opportunities through restructuring, innovation and entrepreneurship, he said.

The use of technology is delivering productivity gains, and there is growing interest in rethinking how work is structured to prioritise both efficiency and wellbeing.