Queensland businesses are expecting a boost in sales revenue and profits before the end of the year, but conditions overall have a long way to lift from sustained weak levels and historically low profitability, new data shows.

Out today, Business Chamber Queensland’s Pulse Report for the September 2024 quarter shows businesses reported an increase in forward economic confidence immediately after the state election, but actual conditions for the quarter were persistently challenging.

Business confidence in the future of the Queensland economy improved for the second consecutive quarter, and again immediately following the October election.

“But there is still a long way to go – despite improving, confidence is still weak and business conditions will need to significantly change to lift confidence further, and for that confidence to be realised,” Business Chamber Queensland CEO Heidi Cooper said.

“Concerningly, relentless, compounding and significant business pressures have pushed profitability to near historical lows. Profitability over the last 18 years has only been lower during the depths of the COVID economic crisis. This is driven by near-record high operating costs, with four in five businesses recording yet another increase in the September quarter and another 72% seeing an increase in labour costs.

“It’s reflective of a really tough business operating environment in Queensland. Despite this, businesses are looking to the December quarter with some optimism which is testament to their resilience and dedication.

“It’s cautious optimism and businesses are looking to the Christmas trading period with expectations for a lift in sales revenue and profits.”

Overall business conditions could not sustain the improvement recorded in the June quarter and declined marginally in the September quarter.

The data shows businesses are looking to the new government for the critical business and economic policy and reform they need to manage day-to-day and long term.

“In fact immediately after the October 26 election result, our data showed a lift in forward economic confidence, reflective of a new opportunity for a business-friendly government in Queensland,” Ms Cooper said.

There was a significant shift in business constraints in the September quarter, with the top five pressures all reflective of costs, including taxes and charges across all levels of government, wage costs and insurance premiums.

Businesses also report political and economic stability, consumer demand and economic activity, workforce pressures, regulatory burden and restrictive IR laws were impacting their ability to grow and scale.

“We’ll continue to advocate to the Queensland government on these critical issues for business,” Ms Cooper said.

“Businesses are too important to be forgotten. With over 480,000 businesses in Queensland who contribute billions in tax to the Queensland budget, businesses contribute significantly to local Queensland economies and communities and they must be the focus of the new Queensland Government.”

Cautious optimism for the holiday season and beyond

Maleny independent bookstore and cafe, Rosetta Books owner Rob Dodd is optimistic about sales heading into the holiday season and the year to come but says the economic environment is persistently challenging.

“Being a retail business, we always expect an uplift in sales during the December quarter. Purchasing a book and a coffee remains within relatively easy reach for most people,” he said.

“While we have challenges from an economic perspective such as cost of living, I still sense Queensland is in a better position than other states and we’re getting more than our fair share of visitors from interstate and overseas.”

Despite his positive outlook, Rob says retailers and hospitality businesses in Maleny face challenges finding and retaining employees.

“There’s an awful lot of people looking for staff in town, so it’s a challenge to attract and retain them,” he said.

“Housing is pretty limited, so staff are often living off the mountain and looking for work closer to home.”

Following the recent state election and change of government in Queensland, Rob says he’s interested to know how policy and economic priorities will shift in favour of an improved business environment.

“Queensland is on the map. With eight years until the Olympics, I feel infrastructure has moved along a bit, but there’s still a way to go,” he said.

“With the new government, it’s far too early to say if things will improve for business – come back in another quarter and see if the things have materialised that were stated.”

Rob and his wife Lea bought Rosetta Books in October 2022, seeking to create a community where locals could come together as well as a destination for visitors.

“Two years on, we’ve learnt a lot. We’ve enhanced the cafe and the overall customer service; we’re encouraging people to use the store as a community meeting place and we’ve increased stock levels to meet customer needs,” he said.

“The drive up from Brisbane has improved with new transport infrastructure, but we need to work together as a town to provide the best customer service at every touchpoint to ensure people keep coming back.”

Key September quarter Pulse data

• Overall business conditions could not sustain the improvement recorded in the June quarter and declined marginally. General business conditions are satisfactory, reflecting soft sales and revenue, high costs and weak profitability.
• Sales revenue improved with businesses expecting a further lift in the December quarter. Sales revenue in the majority of the state was satisfactory, while businesses in Far North recorded the strongest sales revenue.
• Four in five businesses recorded an increase in operating costs, attributing high rents, electricity and fuel. Operating costs are below this time last year and expected to soften in the December quarter.
• 72% of businesses indicated their labour costs increased and levels are similar to this time last year. Businesses expect a moderation in the December quarter.
• Profitability declined in the September quarter reflecting continuing soft sales and revenue and high operational and labour costs. Profitability was only lower during the COVID economic crisis, on an 18 year trend. Profitability is expected to improve in the December quarter but not beyond weak levels.
• Employment levels were satisfactory and unchanged, continuing the six-year trend.
• Business investment is expected to decline in the December quarter with the capital expenditure index to reduce, following a marginal increase in the September quarter. Capital expenditure is satisfactory.