New data from the Australia Bureau of Statistics showed that although the ACT unemployment rate dropped to 4 per cent in trend terms in December, the territory's workplace participation rate has also continued to fall.

The trend participation rate - which shows how many people are either working, or actively looking for work - now stands at 70.9 per cent, a drop of 1.8 percentage points since 2012. It is at its lowest point in at least three years.

ANZ senior economist Cherelle Murphy said the figures showed some discouraged ACT workers were leaving the workforce altogether.

She said Canberra was feeling the effects of job cuts in the Commonwealth public service, which had created uncertainty in the territory's economy.

"The economy is traditionally quite a strong one by Australian standards and I’d say that hasn’t necessarily gone away, but there are vulnerabilities due to current conditions and there is a slow down as a result of that uncertainty," she said.

"There are definitely some vulnerabilities in the ACT that we haven’t seen for a while."

Ms Murphy said that although Canberra still had the second-highest participation rate in Australia, it had fallen quickly in the past 12 months.

"I think the bigger story is that we don’t know what is to come and there’s good reason to expect that the worst of the labour market news is in front of us, not behind us," she said.

"It does seem like there is some uncertainty. And we probably won’t know what will happen till the budget."

Ms Murphy said forward indicators of employment for the territory were not promising. New data for job advertisements in the ACT had shown a large decline.

Jobs ads fell by more than 18 per cent in 2013, the second largest decline nationally after Western Australia.

"[This] is all consistent with a weakening or softening labor market," Ms Murphy said.

The ACT & Region Chamber of Commerce and Industry chief executive officer Andrew Blyth said ACT businesses weren't hiring and had approached the chamber for advice on downsizing and restructuring.

"I think it’s noticeable with the vacant signs and the leasing signs up on office buildings. People are finding it harder to find tenants, you see shops that almost permanently have 70 per cent off. Those are telltale signs that the ACT economy is starting to feel the pinch," he said.

Mr Blyth said the new statistics and ongoing job cuts showed the time had come for the ACT to grow its private industry.

He called on the federal government to look into outsourcing work to the ACT's private and not-for-profit sectors.

"We think that there’s a strong argument to be made that the outsourcing of government programs make sense and can be done 20-25 per cent cheaper through the private or not-for-profit sector," he said.

Canberra Business Council chief executive officer Chris Faulks said the ACT needed to look for opportunities that would come from the downsizing of the federal bureaucracy.

"There will be opportunities for the private sector to deliver some of those services and programs. Our objective now is that we minimise the impact and maximise the opportunities that can come to the ACT," she said.

Ms Murphy said the one bright spot for the ACT economy was a pronounced jump in the property industry confidence index.

The territory's confidence index rating rose to more than 110, with 100 ranked as neutral, its highest ranking in more than two years.

"There was a really strong bounce in the ACT," she said. "Which was uniform across the Australia, but it did suggest there were pockets of the economy that were doing okay."