Cairns Economic Monitor June 2026
The economic outlook for Cairns and Far North Queensland remains resilient, despite growing uncertainty around proposed Federal Budget measures.
While several key tax reforms are yet to be legislated, they have already sparked considerable debate and could significantly influence business structures, investment decisions and long-term planning. For business owners, staying informed and seeking advice before making major decisions will be critical in the months ahead.
On the local front, the Cairns labour market continues to perform strongly. Trend employment increased by a further 200 jobs, while the unemployment rate remained steady at 4.4%. Cairns is one of fewer than 10 regions across Queensland to record a decline in unemployment over the past six months and has achieved the second-largest improvement during that period. While employment growth remains slightly below Queensland and national averages, the region's labour market continues to demonstrate strength and stability.
Inflation data delivered some encouraging news, with the headline Consumer Price Index (CPI) easing from 4.6% in March to 4.2% in April, helped by lower fuel prices and coming in below market expectations. However, underlying inflation remains a concern, with the Reserve Bank's preferred measure, Trimmed Mean inflation, edging up to 3.4% and sitting at 3.5% for the March quarter. As a result, financial markets are still anticipating a further 0.25% interest rate increase later this year, potentially taking the cash rate to 4.60%.
The construction sector also showed signs of improvement, with building approvals strengthening in March. While the trend remains slightly lower overall, positive revisions to previous months suggest the sector may be gaining momentum, providing cautious optimism for future building activity across the region.
Overall, Cairns enters the second half of 2026 with a strong labour market, easing headline inflation and early signs of recovery in construction, although ongoing uncertainty around tax policy and interest rates will continue to influence business confidence and investment decisions.