Nationally, the Roy Morgan business confidence index dropped by 6 points to 90.2 and was at the lowest level since November 2020.

In Queensland, business confidence has plunged to 70.5, a big drop from a year ago when it was 98.9. The next closest state is Victoria on 88.8.

The index’s neutral level is 100 so Queensland’s confidence was well into the negative.

The Chamber of Commerce and Industry’s Pulse survey showed a similar sentiment and found that consistently high operating and labour costs resulted in weak profitability.

It showed macroeconomic issues rather than business performance were the likely reason for deteriorating confidence in the national and state economies. This included inflation and anticipation of a slowing economy due to higher interest rates, as well as ongoing widespread labour and skills shortages.

The release of the Roy Morgan data comes ahead of big week for the State Government with its mid-year economic review to be released, along with the release of key national economic data and a Reserve Bank board meeting that is expected to increase the cash rate for the eighth consecutive month.

The Federal Government is also expected to spell out how it would mitigate soaring energy costs with a possible cap on coal prices.

Roy Morgan said its survey showed the Federal Budget failed to boost confidence in the business community by any significant amount.

“The biggest driver of the drop in Business Confidence related to the performance of the Australian economy over the next year with only 34.1 per cent (down 8.1ppts) of businesses expecting “good times”, while nearly two-thirds of businesses, 63.6 per cent (up 6.5ppts), say there would be “bad times” for the economy.

“However, businesses are still positive about their own prospects, with 44.7 per cent (up 3.2ppts) of businesses expecting to be better off financially this time next year compared to 26.9 per cent expecting to be worse off.’

The most confident industry was education and training at 111 points and Roy Morgan said it was likely to be linked to the return of international students.

The national mining sector remains above the neutral level at 106, but that was down 8 points on the previous reading. Accommodation and Food Services, which includes tourism, also remained above neutral.

Finance and Insurance had the lowest level of confidence at 55.1. Electricity, gas and water was not far away at 59.2.

ABS data released today also showed that gross operating profits fell by 12.4 per cent in the September quarter while wages rose 2.9 per cent.

A separate survey from Deloitte showed confidence among chief financial officers remained steady but they were also wary about the uncertain economic outlook.

A net 66 per cent were feeling optimistic about the current financial prospects of their company.