BUSINESS confidence in the Queensland state economy has rallied strongly in the March quarter, increasing to levels not experienced since 2008 prior to the GFC, according to the latest Commonwealth Bank CCIQ Pulse Survey of Business conditions released today.
Issues such as payroll tax, red tape, abolition of the waste levy and tighter economic and fiscal disciplines have had a direct impact upon the optimism shown.
CCIQ President David Goodwin said, "Clearly the surge in optimism amongst Queensland business is a good thing as optimistic businesses invest in infrastructure, people and services and help drive the economic fortunes of the State. What we know is that business and consumer confidence translates into spending and investing and can therefore make or break an economy."
The survey found that Queensland businesses suffered a challenging March quarter with sales, profitability and employment remaining down for most sectors over the period.
"Obviously as a state we are not out of the woods yet, however a renewed optimism amongst the business community will help to sow the seeds of long term economic growth and reverse the challenging trading period experienced by businesses over previous quarters," said Mr Goodwin.
In relation to the national economy businesses are feeling less optimistic.
Business confidence in the Australian economy continued in negative territory in the March Quarter with an increasing number of businesses expecting the national economy to become weaker over the coming twelve months.
Mr Goodwin was concerned that events and policy at the national level could erode gains made in Queensland business confidence.
"The report sends a clear message to the Federal Government that they must start listening to the needs of the business community," he said.
"There is now the real possibility that the Queensland State economy returns to the historic, pre-GFC trend of outperforming the national economy as the resource industry continues to boom and other sectors recover."
Key findings of the Commonwealth Bank CCIQ Pulse Survey of Business Conditions for the March Quarter 2012 include:
- Pulse Business Confidence - Queensland Economy Index increased by over 10 percentage points to 60.8 with more than half (55 per cent) of all businesses expecting economic conditions in Queensland to be stronger over the coming twelve months.
- The majority of businesses reported weaker (38 per cent) or similar (36 per cent) sales and revenue outcomes over the past three months, however a growing number of businesses (37 per cent) expect stronger sales and revenue conditions for June. Accordingly the Pulse Sales and Revenue Index is forecast to reach 55.1 in June 2012.
- The Pulse Profitability Index remained relatively steady at 41.8 over the March Quarter. This is consistent with reports of generally slow business conditions over the past three months, dampened by the election period, poor weather and the usual post-Christmas and holiday period slump.
- The Pulse Employment Index fell slightly to 45.4 in the March Quarter reflecting an increase in businesses reporting weaker employment levels (up by 7 percentage points to 30 per cent).
- The on-going trend, reflected in a marginal decrease in the seasonally adjusted Pulse Capital Expenditure Index to 41.7 for March, has been for capital expenditure to remain the same (49 per cent of business respondents) or weaken (37 per cent of business respondents).
- Level and demand and economic activity continues to be the most significant factor impacting on opportunities for business growth. This is largely influenced by continued falls in consumer confidence and spending and reduced international demand due to international economic stability and the high Australian Dollar.
- Political and economic stability also remains a key concern for Queensland businesses. Whilst many businesses have commented that they are confident the new State Government will be conducive to growth, concern remains over the ability of the Federal Government to instil confidence in the consumer market and economic environment.