Study: Business recruitment, investment, profit decline

RECRUITMENT, investment and profit expectations for businesses in the country in 2021 went sideways rather than exhibiting a more normal recovery, according to a survey.
The 2021 PNG 100 CEO survey conducted by Business Advantage International, between January and March, asked chief executive officers how their businesses performed in 2020, against their expectations.
The survey captured the depth of the Covid-19 crisis and the sense of uncertainty that existed among businesses in Papua New Guinea.
Westpac’s senior economist Justin Smirk, in his analysis of the survey results, noted that expectations remained below the historical averages, suggesting a below average outcome for employment, investment and profits.
Smirk highlighted that while plans for investment and recruitment were more upbeat than 2014’s low, profits remained just on par.
“Given the magnitude of the Covid-19 shock, it is very disappointing that businesses are not looking for a more meaningful recovery, which would at least see an average rise in expectation plus a further boost to make up from some that was lost in 2020,” he said.
“This is very worrying for formal employment expectations.
“In each year of the survey, employment has been expected to grow, but the official data has been more volatile than that.
“The 20 per cent result for 2021 should be considered relative to the average of 37.7 per cent.
“For investment expectations, the print was 40.0 per cent, compared to an average of 59.2 per cent, while profits printed 37.7 per cent compared to the historical average of 59.3 per cent.
“For employment in particular, the outlook is not very promising.
“So far, the hit to formal employment from the coronavirus pandemic has been relatively modest given that it is on par with the last downturn through 2017 and
2018.
“However, the poor employment expectations for 2021 suggest that it is likely formal employment in the non-minerals sector will contract again through 2021.
“We are still some distance away from a robust sustainable recovery in employment.”