According to the Deloitte Queensland Index, the performance of the state’s public companies was impressive despite the drop in total value from $124.1 billion in the December quarter to $121.8 billion in the March quarter.

The Queensland index has also risen by almost 27 per cent in the past 12 months and was still outperforming the All Ordinaries index over the past year by a comfortable margin.

Queensland was bolstered by its dominant gas and resources sector, according to Deloitte partner and Queensland merger and acquisition leader Rob McConnel.

“Queensland’s economy continues to provide plenty of reasons for optimism,” he said.

“As we emerge from the pandemic, household consumption has been strong, with spending at hotels, cafes and restaurants driving consumption growth in the past quarter.

“With state and international borders re-opening for its tourism sector in the first quarter, Queensland is able to play to its strengths again.”

He said the resources sector had benefitted from the Ukraine conflict because of the subsequent increase in commodity prices.

However, there had been a downturn in merger and acquisition activity, which McConnel attributed to Russia-Ukraine war and rising inflation.

Queensland had 56 M&A deals in the quarter, a fall of 13 per cent on the same time in 2021, This was the lowest level since the peak of the pandemic in the second quarter of 2020.

However, McConnel said optimism was strong among dealmakers and competition for quality assets would continue.

“In particular, a rise in takeover activity has seen mega-deals back in the spotlight with private equity sitting on significant levels of dry powder and other pools of private capital expected to continue to support M&A activity in 2022,” he said.

Deloitte’s Stephen Smith said the outlook for business investment in Australia was solid.

“The key positive is that the economy has recovered faster than previously expected,” he said.

“Many businesses also now see the worst of the pandemic as being behind them.”