'Snowball effect' hitting as companies react to rates rise, growing costs

Nick and Amanda Kuhn run an organic egg business in the rural town of Tiaro, about 220 kilometres north of Brisbane.

The pair say their family-run operation has been struggling to slow the "snowball effect" of rising costs.

"There comes a point where you just can't keep wearing the cost because you're wearing so much but you can't keep charging more for your product," Mr Kuhn said.

"It's a very fine balancing act."

A recent report from Business Chamber Queensland found confidence in the economy was at its lowest level since the Global Financial Crisis.

 It found 95 per cent of businesses were feeling an impact of higher fuel prices, with at least 60 per cent reporting higher costs from freight, transport and cashflow issues.

'Less profit for the business'

The Reserve Bank lifted the cash rate for the fourth time this year on Wednesday, pushing rates to their highest level since 2011, at 4.6 per cent.

Mr Kuhn said his home mortgage repayments increased by "roughly $1,000 a month", due to the hikes.

"It's harder to service loans. It's harder to get new loans if you want equipment or other things," he said.

Businesses have now been banned from adding a surcharge to card payments, which Mr Kuhn said helped cover expenses including petrol and wages.

"It's going to cost us a couple of thousand dollars to wear that, it's less profit for the business," he said.

To recoup any losses, Mr Kuhn told customers there would be a price hike on egg cartons.

Hervey Bay honey producer Christopher Hall was also grappling with whether to increase the price of his raw honey buckets to $16 per kilogram.

"In the previous 10 years we've just absorbed the increased costs because it's important to maintain honey as cheap as I possibly can," Mr Hall said. 

"We simply can't do that anymore."

Mr Hall said the extra revenue would cover rising petrol prices and growing cost of plastic containers, which is up by nearly 40 per cent this year.

Tough times ahead

CQ University regional economics development professor John Rolfe said it could take up to 18 months for this week's interest rate hike to "wash through the system".

Professor Rolfe said businesses needed to make calculated spending decisions to ensure they can survive.

"Be prepared to make an early call about cutting costs so they don't get caught out," he said.

But Professor Rolfe said not to expect relief any time soon.

"Governments are under pressure to not spend as much to try and get inflation down," he said.

Despite the struggles, Mr Hall said he and his business will endure.

 "We have had to increase prices to stay afloat but small producers do make the world go round," he said.