The Business Advantage PNG/Westpac PNG 100 CEO Survey has asked the CEOs of Papua New Guinea’s largest companies for their profit, investment and recruitment expectations for 2023. It also asked them to name the top impediments facing their businesses. Here are the results.

Since 2012, the data collected for the PNG 100 CEO Survey has revealed trends in business confidence in Papua New Guinea. The survey is run by Business Advantage PNG in association with Westpac. Credit: Pixabay

The results of the new PNG 100 CEO Survey, released today, reveal a significant rise in the confidence of Papua New Guinea’s leading businesses.

First, Business Advantage PNG asks the CEOs of PNG’s top companies how profits were last year, against their expectations.

‘For the first time since 2019, no CEOs expected their profits to be substantially lower this year than last.’

Overall, around half of respondents (49 per cent) said their profits were higher than expected in 2022.

This group was divided into around 19 per cent who reported profits greatly exceeded their expectations and around 30 per cent who said profits slightly exceeded expectations.

Another 27 per cent said profits had met expectations.

Meanwhile, 19 per cent reported profits fell slightly short of expectations in 2022.

Only 5.41 per cent of respondents reported profits substantially short of expectations (last year, it was 2.78 per cent). By contrast, this figure was 35 per cent back in 2021, when CEOs expected COVID-induced disruptions to drag profits substantially lower.

Source: 2023 PNG 100 CEO Survey

Profit expectations

Next, we asked CEOs about their profit expectations for 2023.

This year’s results are pointing to another inflection year for growth, with 75 per cent of CEOs expecting to exceed last year’s profits (last year, it was 55.55 per cent).

‘Overall, almost three quarters of respondents (72 per cent) expect to invest more on capital expenditure this year’

For the first time since 2019, no CEOs expected their profits to be substantially lower this year than last.

Meanwhile, just 11 per cent predict profits will just meet expectations: last year, 36.11 per cent said the same thing.

Source: 2023 PNG 100 CEO Survey

Investment intentions

One important indication of business confidence is how much companies are planning to invest in new plant, equipment and other assets.

Overall, almost three quarters of respondents (72 per cent) expect to invest more on capital expenditure this year, compared to only half respondents in last year’s survey.

Of these, 41 per cent of CEOs expect a substantial increase in capital expenditure this year, compared to 28 per cent last year.

Meanwhile, just 10 per cent are expecting to reduce their spending this year.

Source: 2023 PNG 100 CEO Survey

Recruitment intentions

Every year, the survey asks employers for their recruitment plans for the coming year.

Based on our CEOs’ responses, 2023 looks like being a good year for employment.

Overall, respondents expecting to recruit more staff is up from 46 per cent in 2022 to 64 per cent this year. Almost a quarter (23 per cent) were planning to substantially increase their head count.

Meanwhile, less that 3 per cent of CEOs told us they were planning to reduce staffing levels at all.

Source: 2023 PNG 100 CEO Survey

Business impediments

Each year, the survey asks CEOs to rank the top impediments facing their business.

The chronic shortage of foreign exchange has resurfaced as most critical impediment confronting CEOs in 2023. As the following table indicates, CEOs rated foreign exchange (4.08 out of a possible 5) and unreliable telecommunications (3.90), both outside the top six critical impediments last year, as the top two issues as they enter a year of strong expectant growth.

These were followed by security/law and order, unreliable utilities, shortage of expertise/skills, and lack of government capacity.

Regulatory uncertainty, the single biggest issue last year, no longer sits within the top six impediments, while COVID-related restrictions, also a top six issue last year, are down towards the bottom of the table.

Source: 2023 PNG 100 CEO Survey

The 2023 PNG 100 CEO Survey was conducted by Business Advantage PNG between November 2002 and January 2023. Respondents came from a representative sample of the largest companies across all of PNG’s key economic sectors.

Click here for Westpac Senior Economist Justin Smirk’s analysis of what the results of this year’s PNG 100 CEO Survey mean.