Over two-thirds of Papua New Guinean businesses have experienced a ‘very negative’ impact from the COVID-19 crisis, according to a recent survey. Uncertainty over the duration of the crisis is considered to be the greatest challenge.
Credit: Busy market in Port Moresby before the COVID-19 crisis. Credit: Kahunapule Michael Johnson/CC BY-SA 2.0
The fourth Pacific Business Monitor: Survey, conducted by Pacific Trade Invest, sought responses from 134 businesses across the Pacific. It found that 92 per cent of PNG respondents report a negative impact on their businesses, with 67 per cent saying they experienced a ‘very negative’ impact and 25 per cent a ‘slight impact’ because of the coronavirus pandemic, which saw PNG enter declare a state of emergency that was lifted in mid-June.
‘A small number of businesses are beginning to find stability and a new way of operating.’
More than half (58 per cent) of the PNG respondents reported a significant decline in revenues, while 17 per cent experienced a slight decline.
Survival mode
Only 25 per cent of businesses in PNG are very confident they will survive COVID-19. Credit: Pacific Trade Invest
Despite the financial damage, the survey found that PNG businesses are reasonably confident they will survive COVID-19. Only eight per cent said they were ‘not confident at all’, while 42 per cent indicated they were ‘somewhat confident, and a quarter expressed a high level of confidence in withstanding the crisis’.
Caleb Jarvis, Trade & Investment Commissioner, Pacific Trade Invest (PTI) Australia, said businesses across the Pacific continue to be in survival mode.
‘It’s encouraging to see the number of businesses reporting that are reducing working hours and staff numbers has decreased, which shows a small number of businesses are beginning to find stability and a new way of operating,’ he said.
‘This is also reflected with the negative toll on the mental health of business owners easing, with those reporting a very negative impact on their metal health halving since the last survey and positive sentiments of feeling optimistic and happy increasing from the last survey.’
Financial support and resilience to rebuild
Credit: Pacific Trade Invest
Over half of those surveyed are expecting a long-term impact from the crisis. Only 11 per cent of respondents said revenues would return to previous levels this year, while 36 per cent of respondents expect revenue to return to previous levels next year.
Reducing operational costs (49 per cent), working hours (39 per cent) and staff numbers (37 per cent) were the most used strategies to return to previous levels. Diversifying products and services (29 per cent) and reducing wages (26 per cent) were also responses.
The greatest challenges were listed as: uncertainty over how long the crisis will last (93 per cent), the impact of closed borders (90 per cent), poor cash flow (89 per cent) and the impact of the lockdown (81 per cent). More than half of businesses surveyed indicated they needed financial support.
The survey recorded high levels of dissatisfaction with the PNG government’s response to the crisis: 58 per cent indicated they were ‘very dissatisfied’ and a quarter said they were ‘somewhat dissatisfied.’
According to the manager of one SME in the agriculture, forestry and fishing sector, government assistance is yet to materialise. ‘Tax incentives have not happened, government subsidies have not happened; but we have to remain neutral and await the government response.’
Jarvis said the private sector will be the key in rebuilding Pacific economies. ‘As we can see through the global uncertainty that COVID-19 has created – it’s going to be a very long-road ahead.’
The post The great unknown: survey suggests uncertainty the biggest threat to Papua New Guinean businesses appeared first on Business Advantage PNG.
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