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Labour costs reach record high as businesses open their wallets

Business

Labour costs for Queensland businesses reached a record high in the March quarter as more workers were employed and higher wages paid, according to the latest survey.

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The Queensland Chamber of Commerce and Industry Queensland’s Pulse survey said business was now paying premium wages to attract staff and that had pushed up the labour cost index beyond the previous peak in 2008.

“Despite this, one in four businesses expect to increase employment levels in the June quarter,” CCIQ’s policy and advocacy manager Cherie Josephson said.

Profitability fell for half of those surveyed in the March quarter, but investment improved.

Business confidence in the Queensland and national economies also improved in the quarter but was down on the same time last year. The Queensland outlook increased 10.5 points on the index and the national increase was 10.4 points.

That indicated a satisfactory, but not high, outlook for the economy.

“We do expect to see growth in the June quarter with general business conditions, sales and revenue and employment levels all tipped to increase, however substantially improved profitability may take longer,” Josephson said.

She said the improvement in business confidence was off a lower base in the December quarter when Covid disruptions hit business.

She said retaining and recruiting staff was the most significant constraint on business growth.

Seventy per cent of businesses also reported increased operating costs in the March quaarter.

“Global supply chain disruptions combined with rising fuel prices have led to significant price rises for business inputs, which are on top of the day-today business costs such as rent and insurance,” Josephson said.

 

 

 

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