PNG CEOs optimistic about business prospects
23 May 2012
PAPUA NEW GUINEA'S MAJOR EMPLOYERS are optimistic about the year ahead, with almost 90% expecting higher profits in 2012, according to a major new business survey.
The PNG 100 CEO Survey, conducted by Business Advantage International and published in the new edition of Business Advantage Papua New Guinea, asked the CEOs of PNG’s major companies across all sectors of the economy to answer questions about their profits, future investment and employment plans, and the key issues facing their businesses.
Higher profits expected. The survey findings show the country’s major employers are bullish about the year ahead, with almost 90% of respondents expecting 2012 profits to exceed those of 2011. Remarkably, none of those surveyed expected a decline.
This statistic is all the more impressive when the companies’ 2011 performances are taken into account: two-thirds of respondents said their 2011 profits had exceeded expectations.
Greater investment. There is evidence from the survey that these stronger-than-expected profits are being ploughed back into business. 57% of respondents indicated that their own investment in new plant, equipment and other assets would increase in 2012, with a further 25% saying investment would at least match 2011 levels.
More jobs. There is also good news on the employment front, which is especially welcome given PNG’s low levels of formal employment. Just over 50% of responding CEOs said they were expecting to increase their headcount during 2012, with a further 40% saying their staff numbers would remain steady.
Critical issues. While the survey reveals a positive picture of corporate growth, there are undoubtedly some major issues facing PNG’s corporates. We asked PNG’s top CEOs to rank various business issues on a scale from 1 to 5, where 1 meant the issue was not relevant to their business and 5 meant it was mission critical.
The four most critical issues were, in order: PNG’s skills shortage; security/law and order problems; getting access to necessary expertise; and the lack of reliability of PNG’s state-owned utilities.
“Overall, the business issues uncovered by the PNG 100 CEO Survey are not a big surprise to those familiar with PNG’s business environment,” said Andrew Wilkins, Publishing Director of the Business Advantage International.
“What may surprise many, particularly those overseas, is that PNG’s top corporates are flying high in the face of such challenges.'”
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