CCIQ Pulse Report: Business performance improves in June quarter but Queensland and national economy outlook deteriorates
Overall general business conditions in Queensland improved in the June quarter, new CCIQ data shows, but record high labour and operating costs have deteriorated businesses’ confidence in the economy.
Key facts:
- CCIQ Pulse Report for the June 2022 quarter is out today.
- General business conditions improved in the June quarter but 12-month outlook for both the Queensland and national economies are weak.
- Business operating costs and labour costs reached highest levels on record.
- 92.5% of businesses reported increases in fuel prices in the three months to June, 82.7% saw increases on insurance, 79.4% in logistics and supply chain costs, 72.3% in electricity and 72.1% in raw materials and stocks.
Chamber of Commerce and Industry Queensland (CCIQ) Pulse Report for the June 2022 quarter shows while general business conditions improved largely as a consequence ofstronger sales and revenue, operating and labour costs reached new record highs and profitability remained weak.
Rising interest rates and energy costs have also contributed to the fall in business confidence in the Queensland and national economies over the next 12 months, CCIQ Policy and Advocacy Manager Cherie Josephson said.
“We’re seeing factors which are also impacting consumer confidence, such as energy price increases and interest rates, having a similar impact on business confidence,” Ms Josephson said.
“In the June 2022 quarter, we saw a decoupling of business performance and confidence; a significant deterioration of business confidence but solid business performance with similar expectations for the September quarter.”
Ms Josephson said despite the outlook, 42% of Queensland businesses indicated their sales and revenue improved during the June quarter.
Employment levels also increased in the June quarter with a further improvement expected in the September quarter.
“While sales are strengthening, businesses’ ability to grow is being held back by continued rising operating costs,” Ms Josephson said.
“Business confidence took a turn for the worst as a result of ongoing rising wage and labour costs, rising inflation impacting costs of goods and services, increasing fuel and energy prices and supply chain disruptions which are causing stock shortages and delays in both goods and services.
“Businesses need certainty about what support they’ll be offered for rising operating costs, including energy, insurance and fuel costs if there was to be any sustained improvement in business confidence over the next 12 months.”
CCIQ Pulse Report June quarter 2022 key findings:
- The Queensland economy 12-month outlook decreased significantly by 8.9 points and indicates weakening growth prospects over the coming 12 months. Macroeconomic issues relating to inflation and higher interest rates impacted the decline in Queensland business confidence.
- Business confidence in the Australian economy for the next 12 months also decreased by 14.6 points to 38.1.
- General business conditions improved in the June quarter, largely as a consequence of better sales. The June quarter index of 53.2 increased 8.2 points from the March quarter.
- Operating costs in the June quarter rose 5.6 points to a record high of 79.8.
- Labour costs in the June quarter increased significantly to a new record high of 78.3 index points.
- The profitability index increased 3.4 points to 34.1, however one in two business indicated their profitability fell in the June quarter.