The Canberra Business Chamber’s latest Business Beat report shows the Iran War, higher interest rates, inflation and the Federal and local budgets have all contributed to the decline.

At the start of the year, 39 per cent of businesses reported feeling positive about business conditions, but that has now dropped to 32 per cent.

34 per cent of respondents are now expecting their businesses to shrink, compared to just 14 per cent at the beginning of the year, and 27 per cent are expecting to employ fewer people, compared to just 15 per cent in January.

The cost of doing business was cited as the biggest challenge, with reduced customer demand second.

Chief Executive of the Canberra Business Chamber Greg Harford said we are very much operating in a world where around a third of businesses are doing well, a third are just scraping by, and another third are facing problems.

“Unfortunately, we are facing a situation where many businesses are deeply challenged by increases in the cost of doing business while, at the same time, customer demand has reduced” Mr. Harford said.

“This reflects both cost of living pressures impacting households, but also the ongoing attempt to reduce consultancy spend by the Federal Government.”

“There is also significant concern in the business community about Federal and Territory tax settings, particularly the Commonwealth Government’s changes to Capital Gains Tax and trust income, and the expansion of Payroll Tax by the ACT Government.”