Queensland businesses are the most likely to expect weaker Christmas trading conditions across Australia, according to the Sensis Business Index released today.

Report author Christena Singh said Queensland businesses were expecting considerably slower conditions than last year and many were electing not to hold a Christmas party for staff and clients.

Just 17 per cent of Queensland businesses are expecting a busier Christmas period compared with last year, while 33 per cent are expecting trading to be slower, with the remaining expecting business to be about the same as last year.

On average, Queensland businesses are predicting Christmas trading to be 20 per cent busier than last year and 23 per cent quieter than last year (of those expecting an upswing and downturn respectively).

"In fact, Queensland businesses have the nation's lowest sales and profitability expectations for the coming quarter," Ms Singh said.

The Sensis Business Index also indicates that just over half of Queensland businesses are planning a Christmas party. Five in 10 of these are planning a party for staff and one in 10 is planning a party for clients.

"Business confidence has improved in Queensland during the quarter, but remains considerably weaker than it was this time last year, and helps to explain the mixed outlook for Christmas trading," she explained.

Trading conditions did improve during the quarter, but most indicators remain in negative territory and below the national average.

The quarterly survey, which began in 1993, provides the latest snapshot of small and medium enterprise's (up to 199 employees) perceptions and activity. It is based on a sample size of 1,800 from metropolitan and regional areas, interviewed between 18 October and 15 November 2010.