Originally published via The Courier Mail
Confidence has plummeted among Queensland businesses, with firms suffering falling profits, slashing investment and more employers laying off staff than recruiting.
Sentiment has dipped to a four-year low, according to the latest Suncorp-CCIQ Pulse survey, to be released today.
The report says political uncertainty, and the prospect of a Labor federal election victory, weigh heavily on the private sector.
“A federal election set down for May has compounded negativity as a change of government presents the near-term challenge of what a Labor national government will mean for business in terms of capital investment as well as an industrial relations framework viewed as potentially hostile to business more broadly,” it says.
The report also flags a lack of political will to expedite expansion of the resources sector, through projects such as Adani’s Carmichael mine, as a source of frustration.
The Pulse survey of 400,000 small to medium firms is the largest gauge of business sentiment in the state.
It shows confidence in both the Queensland and Australian economies has taken a dive, with both firmly in negative territory.
The economic outlook index for the state fell by 5.1 points between September and December and 10.2 over the past year – to its lowest level since December 2015.
The result for faith in the Australian economy was even worse – down 6.2 points in the past three months, and 12.2 points over the year to hit a low not recorded since June 2012.
There has been a clear reversal in mood towards the Queensland economy during the year. The proportion of businesses expecting economic performance to be weaker has doubled from 21 per cent to 41 per cent, while those anticipating improvement has halved from 30 per cent to 16 per cent.
Chamber of Commerce and Industry Queensland chief economist Dr Marcus Smith said policymakers needed to be more proactive in dealing with the challenges facing many businesses, especially in regional areas.
“Providing Queensland’s small business sector with confidence to invest in their businesses starts with policy certainty at all levels of government and a stable platform upon which to make decisions,” he said.
The survey revealed a decline in general business conditions not seen since March 2015, with a disappointing Christmas trade period not helping.
Investment in capital expenditure contracted in the past three month while operating costs rose slightly.
“Alarmingly, almost half (47 per cent) of Queensland businesses reported declining profitability over the December quarter,” the report said.
Less than a fifth of firms said profits lifted.
“The fall in business sentiment comes amidst a national backdrop where Queensland remains a laggard on key indicators of unemployment, currently the second worst jobless rate behind Western Australia as well as for private sector investment,” the report said.
“Furthermore, job creation within the state has contracted according to the Pulse survey.”
Despite the results, Suncorp Group’s banking and wealth chief executive David Carter said there was reason for optimism.
“There is a lot to be positive about across the state,” he said.
“It boasts a diverse economy which is becoming stronger thanks to a weakening Australian dollar and improvements in export industries including the resource and agriculture sectors.
“The property market has remained relatively resilient, particularly in southeast Queensland which is being supported by strong population growth from the southern states.
“Healthcare and education sectors are creating new jobs and supporting local economies, and government support for innovation will continue to drive local investment and interest.”