CONFIDENCE levels among Queensland small and medium businesses fell during the past quarter, with confidence levels now the lowest of any Australian state or territory.
The November Sensis Business Index results show confidence levels among Queensland SMEs dropped 3% points in the August-November quarter.
Report author, Christena Singh, said that confidence levels in Queensland were driven by a range of factors.
"Businesses are concerned that people in Queensland are not spending, with decreasing business and increasing costs also impacting confidence in the state" she said.
"To put this in context, concern about lack of work or sales is the prime concern raised by SMEs across Australia and is currently at its highest level in the history of the Sensis Business Index."
For operating costs specifically, businesses were most likely to report rising electricity and water costs, with 76% of SMEs in Queensland that paid for these utilities reporting that they seen costs increase in the past year.
This was marginally higher than the 75% of SMEs reporting higher utilities costs nationally."
The last quarter saw lower results across most indicators, with Queensland businesses recording falls in sales, employment, wages, profitability and price performance indicators.
Small businesses in Queensland reported a seven percentage point drop in the wages indicator during the quarter, alongside a three percentage point drop in both the prices and profitability indicators.
The one bright spot was the report of an eight percentage point increase in the capital expenditure indicator during the August to November quarter.
Queensland businesses are reporting a subdued outlook in the months ahead, with lower expectations across key indicators including sales, prices, profitability and capital expenditure.
A significant 21% point drop in sales is anticipated in the November to January period, with businesses also signalling a 17% point drop in expectations for profitability.
"On the bright side, fewer SMEs in Queensland say they plan to decrease the size of their workforce in the coming months, giving them the highest expectations for employment of any state or territory," Ms Singh said.
In the long term Queensland small business is expecting a lift in sales over the next year, recording the strongest net sales expectations by any state and territory, with a net balance result of 42%.
Business confidence in regional areas of Queensland was 4% points higher than SMEs in the metropolitan areas of Queensland.