PNG’s largest businesses are optimistic
Despite significant volatility, Papua New Guinea’s largest businesses remain optimistic about the year ahead.
That’s according to the results of the latest PNG 100 CEO Survey, released on 20 February by Business Advantage International and Westpac PNG, which feature for the first time the country’s inaugural Business Expectations Index.
The results were announced at a special business breakfast in Port Moresby hosted by the Port Moresby Chamber of Commerce and Industry.
‘Each year since 2012, the PNG 100 CEO Survey has asked the CEOs of PNG’s top companies for their profit, investment and recruitment expectations for the year ahead,’ said Andrew Wilkins, Publishing Director at Business Advantage International.
‘We also ask businesses about the impediments they face. This allows us to draw a picture of changing business confidence in PNG.’
The 2020 survey’s key findings include:
- Almost 50% of CEOs surveyed said they were expecting profits to be higher in 2020 than in 2019, while just 17% were expecting profits to drop this year.
- Around 50% also said they were planning to invest more in 2020 than in 2019, while just under 20% said they would be reducing their spend.
- In mixed news for PNG’s workforce, 36% of CEOs surveyed said they were planning to employ more people in 2020, while 22% were planning to reduce their staffing levels this year.
CEOs said the biggest impediments to their businesses were (in order of seriousness): foreign exchange shortages, unreliable telecommunications, unreliable utilities (eg water and power), a shortage of skills in the workforce, and ‘regulatory uncertainty’ – a term that reflects concerns about the Marape Government’s proposed changes to business-related laws.
“We are pleased to share our expert analysis of the survey results which sets the scene for the business year,” said Brett Hooker, Westpac PNG chief executive. He added that, Westpac Senior Economist, Justin Smirk, has provided analysis of the eight years of survey results. In doing so, he has created PNG’s first Business Expectations Index. “Justin is not new to PNG; he’s been doing this for a few years now, so we are confident with his insights into the survey.”
‘For 2020, profit expectations remain positive but the improvement on the previous year [2019] is the smallest since the post-resources boom funk of 2014,’ he observes.
‘Following a disappointing year in 2019, the survey responses suggest firms are expecting, at best, a modest rebound in 2020.’
After improvements over the past three years, the shortage of foreign currency in PNG has again risen to the top of business concerns in 2020.
‘Telecommunications have improved from 2019 but are still a bigger constraint than they were in 2017, as are utilities and security,’ said Smirk. ‘It is disappointing to see these key issues deteriorate further.’
It is not all bad news for business: logistics challenges have improved significantly from 2016, as have office and accommodation rental costs and inflation.
About the PNG 100 CEO Survey
The 2020 PNG 100 CEO Survey was conducted by Business Advantage International between October and December 2019. The survey included senior executives from a representative sample of PNG’s largest companies, across all sectors of the economy.
The full survey results are published in the 2020 edition of PNG’s annual business investment guide, Business Advantage Papua New Guinea, which was launched at the breakfast and available online at https://www.businessadvantagepng.com/annual/
