Peter Coultas is trading through one of the busiest festive seasons he can remember but that's been hard to celebrate.

The Ipswich pub manager of 14 years said the December rush has not slowed much but without enough staff, the business boom has been tough to handle.

"We're struggling to find staff, like many in the industry," he said.

"If we lose a couple of staff that are sick, the pool of people to call in isn't there anymore."

Mr Coultas has been forced to scale back the pub's menu to help ease staffing pressures.

Compared to some other businesses in Ipswich, it is a small sacrifice.

An Ipswich pizza store announced on social media that it would be closing its doors permanently due to the staff shortage.

"2023 is off to a challenging start as we struggle fill vacant positions left by departing employees," the post read.

"As a consequence, we have made the tough decision to close the pizzeria until further notice."

Mr Coultas said while staff shortages are not a new issue, it has never been this bad.

"All of our staff are paid award wages or above award wages for their age just to attract them and keep them here," he said.

"There is plenty of work out there. No-one should be unemployed because there is work out there."

Ipswich Chamber of Commerce president, Phillip Bell said it's affecting local businesses across the board, not just in hospitality – but it's particularly impacting small family run businesses.

"Ipswich is fairly unique in the fact that we have a significant prevalence of small, mum and dad businesses," he said.

"Those seem to be the areas most affected by the shortage in labour supply."

Stuck in the middle

Business owners have told the ABC the reason they feel they can't attract staff, is because of the city's geographical location.

It's not close enough to the city to attract university students or backpackers, but it isn't regional enough to be eligible for some employment incentives for migrant workers.

Mr Coultas said a recent change meant chefs can now work in his restaurant under a regional employment incentive, but that hasn't been extended to bar staff, waiters or baristas.

"If those backpackers and those tourists are coming out towards Ipswich that would be great," he said.

"Whether it would be for four weeks' work or three weeks' work that would certainly fill the gaps for us."

"And at least give us the opportunity to give the staff that have worked, a break and time to catch their breath."

Ipswich City Councillor, Nicole Jonic has called for the incentives to include Ipswich.

"I think that would help tremendously," she said.

"We feel like a country town but we're a city and we're only half an hour from the capital."

"We're actually classed as greater Brisbane but we are, I feel, regional."

Youth Unemployment above average in Ipswich

The labour shortage comes despite Ipswich having a higher-than-average youth unemployment rate.

The latest census data shows as of 2021, more than 14 per cent of 15 to 24-year-olds in Ipswich were classed as "disengaged with unemployment and education".

That compared to only 9 per cent in all of south-east Queensland.

Ms Jonic said while there are some explanations for the high unemployment rate, she admitted "there are some missed opportunities as well and we're all about unlocking those opportunities to get the best for the people that live here.

"We just endorsed a new economic development strategy late last year and one of the pillars and one of the takeaways from that is youth unemployment."

'Can't always throw money at this'

Some business within Ipswich have begun offering above award-level wages to attract and retain staff.

But it's an incentive many can't afford.

"A lot of businesses that I speak to are operating purely on the margin," said Mr Bell.

"So the capacity to pay sort of higher than award rates or higher than going rates for local labour simply isn't there."