QTC June Economic Forecast: Boost Local Resilience

Mounting Pressures on Queensland's Economy

Queensland's economy, heavily reliant on resources exports and vulnerable to natural disasters, faces converging threats that demand greater local resilience. The state's resources sector generated $115.2 billion and supported 549,519 jobs in 2024-25, but potential US protectionist policies risk disrupting commodity flows to key Asian markets, including China. Global forecasts already reflect downgrades to major trading partner growth by about half a percentage point in 2025 and 2026, with initial estimates suggesting a 0.25 percentage point drag on Queensland's GSP in 2025-26 and sustained lower output levels.

Compounding this, consecutive natural disasters in early 2025, including severe flooding, reduced 2024-25 GSP growth by an estimated 0.75 percentage points. Queensland, Australia's most disaster-prone state, continues to grapple with recovery burdens that strain local governments, businesses, and households. These events expose gaps in preparedness, from infrastructure upgrades to small business continuity.

The push for local resilience highlights tensions often overlooked: while state strategies like the Queensland Strategy for Disaster Resilience 2022-2027 assign 85% of actions to local governments, funding and capacity constraints create uneven implementation. Adaptation investments carry upfront costs that compete with immediate recovery needs, yet inaction risks amplifying future economic hits from climate events and trade shocks. Broader forecasts show GSP strengthening to 2.75% in 2025-26 before easing to 2.5% in 2026-27, assuming private sector rebound and moderating population growth, but external uncertainties cloud this path.

Stakeholders face concrete stakes: delayed resilience measures could escalate disaster recovery expenses into billions, erode export competitiveness, and undermine job security in resources-dependent regions. Balancing global exposure reduction with domestic strengths in services and population-driven demand remains a core challenge.