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The State of the Deal and the Deloitte Queensland Index

Q4 2023

Welcome to The State of the Deal including the 199th edition of the Deloitte Queensland Index, an analysis of Queensland listed companies on the Australian Securities Exchange (ASX).


In a time of increasing economic uncertainty and fears of slowing consumer spending, the Deloitte Queensland Index returned 3.2% in Q4 2023 compared to 8.0% return of the S&P ASX All Ordinaries, 12.5% of the Dow Jones Industrial Average, 5% of the Nikkei 225, 1.6% of the FTSE 100 and negative 4.3% of the Hang Seng.

The performance of the Deloitte Queensland index reflects the net impact of a range of national and Queensland-specific factors. Geopolitical tensions in the Middle East resulted in higher fuel costs and other inflationary impacts across most industries. The mid-year budget update handed down in Dec-23 included various cost-of-living support measures such as free kindergarten for all households, electricity and childcare rebates, a freeze on motor vehicle registration fees, and a doubling of the first homebuyers’ grant. The year-on-year inflation figure for the three months to Dec-23 came in at 4.1%, compared to the RBA’s forecast of 4.5%, and 5.4% in the September quarter.

Following a period of steady interest rates from Jun-23 to Oct-23, the RBA increased the cash rate by 0.25ppts in Nov-23 with no increase during the Dec-23 review. While the RBA’s tightening policy has begun to bear fruit bringing inflation down to the lowest year-on-year level since mid-2022, persistently low unemployment has been an offsetting force.

Local factors specific to Queensland include the extreme weather brought about by cyclone Jasper impacting northern Queensland with rainfall and severe flooding disrupting economic activity and causing substantial physical damage particularly to agriculture, infrastructure, properties and vehicles.

Our Queensland Economic Update explores the key drivers of Queensland’s economy in the fourth quarter of 2023. A positive outlook for mining and energy exports sets Queensland up to be one of Australia’s fastest-growing states in 2024. With Steven Miles taking up the role of Premier following Annastacia Palaszczuk’s resignation, Dr Miles’ more ambitious climate target may have important implications for the State in the future.

Key highlights from the Q4 2023 report include:

  • Market capitalisation: of the 156 QLD-based ASX listed companies increased from $119.8b at Sep-23 to $123.6b at Dec-23.
  • Sector mix: While the index continues to show reasonable diversification, the composition of the Index as at 31 December 2023 has shifted compared to 31 December 2022 with growth in the market capitalisation of Consumer and TMT companies offset by a reduced share of Industrials and Energy & Resources companies.
  • M&A activity during 2H 2023 remained low (across all sectors): with transaction volumes declining 12% and 31% compared to 1H 2023 and 2H 2022 respectively as economic uncertainty from the above-mentioned factors continued to adversely impact buyer confidence. With the expectation of interest rates now reaching a plateau as some recent data indicates that inflation is starting to ease, coupled with the pent-up demand for inorganic growth as well as owners seeking to bring their business to market, we anticipate an influx of M&A activity throughout 2024.


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