Queensland's economy is leading the nation in key indicators as the Omicron wave begins to subside, Treasurer Cameron Dick says, but an economist warns of two potential pitfalls later this year.
Mr Dick said Queenslanders were gaining confidence to start spending and return to workplaces.
Consumer sentiment is the highest in the nation, Mr Dick said.
The Westpac and Melbourne Institute Consumer Sentiment Index report, released on Wednesday, showed Queensland was three points ahead of Western Australia, which recorded the next highest mark.
Australian Bureau of Statistics data released this week also showed that payroll jobs — employee jobs paid through payrolls — for the first two weeks of January rose by 2.1 er cent, the highest in the nation.
The country averaged a 1 per cent rise, after a 6.8 per cent decline in the previous two weeks.
"Payroll growth for Queensland is the strongest in the country. It's more than double the increase in New South Wales and five times the increase of Victoria," he said.
"On an annualised basis, that's $700 million in the pockets of workers."
The Treasurer said Queenslanders were out spending too.
"Spending is up 27 per cent in early February, compared to pre-COVID," he said.
"Again, Queensland leads the nation as the place where we always want to be.
"The numbers look very good."
An exuberant Mr Dick gave the economic update at the construction site for the new Roma Street Cross River Rail Station, which is crucial to Brisbane's public transport future.
Wearing a hard hat and high-vis, he said current train and bus passenger statistics showed Queenslanders were answering the call to return to the office for work.
He said total patronage reached 360,000 travellers each day last week, up from 200,000 a day last month.
"Last Thursday, there was an 80 per cent increase in bus trips and a 50 per cent increase in rail trips compared to the previous Thursday," he said.
'Still a lot of unknowns'
Economist Gene Tunny said while the numbers the Treasurer announced were reason to be optimistic, it was important to "have a lot of humility" when forecasting.
A big unknown is whether there will be a severe winter COVID wave, combined with a flu season.
"Now, that could be disruptive to the economy," he said.
"It's very difficult to forecast what's going to happen with the economy just because of the uncertain nature of this pandemic," he said.
"I think there are reasons to be confident [but] of course, the virus has a say in this.
However, Mr Tunny said that is not to say there are no positives for the economy.
He agreed that the state was leading in a "whole range" of economic indicators.
"Things like consumer sentiment, business confidence, building approvals and job vacancies. There's been a lot of encouraging news from those indicators," he said.
Mr Tunny believed the money spent as a part of the emergency response at the beginning of the pandemic was still having a positive effect.
"Partly what we're seeing is a result of hundreds of billions of dollars in additional money in the economy, and that's continuing to support it," he said.
"There's also the enthusiasm that comes from getting through COVID in a lot better condition than other countries."
Eyeing down inflation
Mr Tunny said there is a risk that high rates of inflation seen overseas in places like the United States and the UK could replicate in Australia too.
"We're talking about rates of inflation we haven't seen since the early 1980s, and while we haven't had inflation of the same rate in Australia, there is a risk that it could be accelerating," he said.
The ABS's Consumer Price Index (CPI) rose by 1.3 per cent in the December quarter of 2021, and up 3.5 per cent from the same time in 2020.
Transport CPI alone rose 12.5 per cent compared to the December quarter of 2020.
Mr Tunny said economists will be keenly watching the index to assess "whether that inflation is becoming entrenched".
"Whether it's not just due to the short-term supply disruptions … is there something else going on? Is it going to feed into expectations?
