Conditions improve for Queensland businesses

By Greg Bell

Business conditions have been pretty varied recently, with no shortage of political and economic turmoil problems facing the nation's firms. However, companies in Queensland in particular have turned a corner, as they've reported improved conditions over recent months.

NAB releases a quarterly Business Survey, which assessed how well firms are performing and what their expectations are for the future. Results for the three months to March are largely positive, especially for those who've invested in commercial property on the Gold Coast.

Conditions may have been slow at the very start of the year, but the bank is now convinced that this is no longer the case. Employment demand and plans from investment seem to have increased, and if they're sustained, there's every chance sentiment could improve even further.

Businesses look for long-term success

NAB Group chief economist Alan Oster explained that companies are now seeing that there is light beyond the recent problems experienced in the financial markets. As a result, their optimism has increased and they are starting to make plans for the future – which may include making an investment in Gold Coast industrial property.

"Persistent market volatility could eventually start to have an impact on the economy via sentiment channels, but at this stage firms actually appear more optimistic about the outlook," said Mr Oster.

The March quarter NAB Business Survey also showed that firms aren't only hopeful about what the future has in store, but they've also revised their expectations upwards since the last quarter. As a result, employment opportunities and the potential for future investment have increased.

Why Queensland is leading the pack

Closer analysis of the results showed that business conditions have improved considerably across Queensland. State treasurer Curtis Pitt explained that the results were the highest in the country, registering an increase of seven points on the confidence index.

Commenting on the survey results, Mr Pitt noted that business conditions improved six points from the previous quarter to reach a positive eight-point reading. This was against the backdrop of a one-point fall across the rest of the country.

"And it backs up the bank's monthly surveys which have reported Queensland firms as having the highest business confidence of any mainland state for nine months in a row," noted Mr Pitt.

Impact on the official cash rate

Business owners are eagerly awaiting the Reserve Bank of Australia's (RBA) next cash rate decision, due to be announced on 3 May. If the rate is frozen for another month at two per cent, it will mark one year since the historic low was reached.

The NAB survey revealed there are some moderate pressures from inflation across the economy. The RBA had previously acknowledged that low inflationary pressures would give it an incentive to further cut the cash rate if necessary, something NAB believes should be avoided for the time being at least.

"Business conditions at these levels do not justify a rate cut at this stage, in our view," stressed Mr Oster.

Make the most of current positivity

With business confidence on the rise, now could be the ideal time to take a closer look at Gold Coast commercial property – and we're on hand to help every step of the way. It's our unique knowledge of this thriving market that sets us apart from the crowd and makes a real difference to your search for commercial real estate.

For an expert service that offers everything you'd expect and more, make sure you speak to the team at Ray White Commercial. We can help your search whether you're buying your first property or expanding an existing portfolio.

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