Canberra Business Chamber CEO Greg Harford described business sentiment in the territory as "as bad as it's ever been." The Reserve Bank is expected to raise rates to manage inflation driven partly by high fuel prices resulting from the war in the Middle East and Australia's tight jobs market.
"The cost of running a business is up, just as the cost of running a household is up," Mr Harford said. "You've got interest rates, the cost of petrol, all of that's really biting consumers' disposable income."
Mr Harford warned that retail, hospitality, and services sectors are most vulnerable. He cited the upcoming expansion of portable long service leave to hospitality and retail — while beneficial for employees — as an additional cost likely to be passed to consumers. Canberra's commercial property rates have also risen by about 8 per cent this year.
"My real worry is for those small businesses that are heavily leveraged, they've got very small margins, they're very reliant on customers coming through the door and spending," he said.
Animal shelters around the country are under strain as families weigh up living expenses against the cost of companion animals, with ongoing pet surrenders reported.