Queensland Treasurer Tim Nicholls concedes the state's unemployment rate is unacceptable as a report shows joblessness to be at "historically high" levels.
The CommSec State of the States report shows that while Queensland is strong on construction work and engineering investment, a sluggish labour market is constraining the state's economy.
Unemployment in the state is 23.1 per cent above its decade average, the report found.
"Its performance is restrained by a historically-high reading on unemployment," CommSec said.
At a media conference on Sunday, Mr Nicholls was asked about Queensland's jobless rate for December rising to 6.2 per cent, giving it Australia's second highest unemployment level after Tasmania.
"We've made no bones about the fact that that's not acceptable," he said.
In a separate interview with AAP, Mr Nicholls said the government remained committed to reaching its four per cent unemployment target over six years, in the face of Australia's weakening terms of trade.
"In trend terms, we're about where we anticipated the unemployment figure to be - we're not satisfied with that and that's why we're working hard to remove impediments for business ... to employ more people," he said.
Mr Nicholls pointed out that Queensland was doing "exceptionally well" in five of the eight categories analysed in the quarterly CommSec report.
Construction activity in Queensland is 52 per cent above its decade-long trend as flood rebuilding continues while retail spending is 15.1 per cent above the decade average.
The state also beat NSW and Victoria on equipment investment.
"We're not saying we've turned the corner, we're not saying the job is done but we're certainly saying there are strong grounds for optimism for the future," Mr Nicholls said.
Western Australia and the Northern Territory led the way in economic growth while NSW had the strongest labour market.