The skills shortage has driven Queensland businesses’ labour costs to a record high, new survey results show.

The Chamber of Commerce and Industry Queensland (CCIQ) Pulse Survey showed employment levels increased 2.9 index points, while labour costs increased 5.6 index points in the March quarter.

It found one in two businesses had invested more in wages and labour costs are expected to increase again in the June quarter. 

CCIQ policy and advocacy manager Cherie Josephson said the data reflected wide-spread labour market and skilled labour shortages across the state and in multiple industries. 

“We know businesses have been paying premium wages to attract and retain suitably skilled staff,” Ms Josephson said.  

“While March quarter data shows businesses were able to secure more staff, it meant their wage bills increased to a record high of 71.4 index points. The last time labour costs were close to these levels was in 2008.  

“Despite this, one in four businesses expect to increase their employment levels in the June quarter.” 

The Pulse Survey also indicated business confidence in the Australian and Queensland economies had improved in the March quarter, although was sitting below levels only 12 months ago. 

“We know these improved results are off a low base following the December quarter when business confidence declined considerably as a result of COVID disruptions and when many businesses were struggling to find staff,” Ms Josephson said.  

Businesses reported retaining and recruiting suitably qualified employees was now the most significant constraint on business growth.

Ms Josephson said CCIQ were recommending a series of workforce measures ahead of the state budget delivery, including incentives for upskilling in traditional and emerging sectors, methods to reinvigorate the regions through migration and relocation incentives, and improved funding arrangements to support education and training programs.

Ms Josephson said seven in 10 businesses also experienced increased operating costs in the March quarter and more than half of businesses indicated their profitability fell.