The 2024 results of Papua New Guinea’s annual business confidence survey, the PNG 100 CEO Survey, are out. What have PNG’s leading companies told us about their profit, investment and recruitment expectations – and the major impediments they face??

Business Advantage International’s Andrew Wilkins presenting the results of this year’s PNG 100 CEO Survey to members of the Port Moresby Chamber of Commerce and Industry this week. Credit: Godfreeman Kaptigau/BAI

Since 2012, the data collected by the PNG 100 CEO Survey has revealed trends in business confidence among PNG’s business leaders. Analysis of the survey data by Westpac has led to the creation of PNG’s first business confidence indices, which are now tracked annually against other key metrics on PNG’s economy.

So, how confident are businesses as we enter 2024?

Profit performance in 2023: the reality

The 2024 survey asked CEOs how profits had performed in 2023 compared to their expectations. The responses suggest 2023 was disappointing for many, with 46 per cent saying that profits had fallen short of expectations.

This is almost double the number recorded in last year’s survey, when only 24 per cent said the same thing.

On the positive side, 36 per cent of respondents said profits were higher in 2023 than expected but this was down from 49 per cent last year.

Meanwhile, 19 per cent said profits had met expectations.

Profit expectations for 2024

What profits do our CEOs think 2024 bring? Overall, the majority (55 per cent) were still expecting their profits in 2024 to exceed those of 2023, although this is 20 per cent lower than last year’s responses, but on a par with the result in 2022.

Meanwhile, 31 per cent predicted profits would meet expectations, while 14 per cent thought profits would be lower than in 2023 (about the same as last year).

Investment intentions

Next, the survey asked respondents for their capital expenditure plans for 2024. While the majority were still positive, the responses were less bullish this year.

Overall, about two-thirds of respondents (65 per cent) expect to spend more on capex this year than last, which is slightly lower than the 72 per cent in last year’s survey.

Last year, just 10 per cent were expecting to reduce their capex in the year ahead. This year, that figure rose to 17 per cent.

Recruitment intentions

The survey asked respondents to indicate their recruitment intentions for 2024, compared to the previous year. The results suggest this is one area where confidence has been maintained.

Most CEOs (63 per cent) are still planning to boost their headcount this year, a similar result to last year’s survey.

Last year, less than three per cent of respondents were expecting to reduce staff levels in the year ahead. That figure, while still low, rose to eight per cent in this year’s survey.

Business impediments

Each year, we ask CEOs to rank the key impediments facing their business. As the table below indicates, respondents rated foreign exchange availability as the top impediment, as it was in last year’s survey as well.

Notably, telecommunications in PNG have improved since the last survey 12 months ago, as far as our CEOs are concerned, falling from second place last year to eighth this year. Or, at least, some other issues have taken precedence.

Chief among these are security/law and order (the number two issue this year), unreliable utilities, lack of government capacity, shortage of expertise/skills, and regulatory uncertainty. Each of these rose one place in the rankings this year and scored higher.

Meanwhile, the supply chain constraints that affected PNG in the last year’s survey have declined in importance, not even making the top ten in this year’s survey.

The 2024 PNG 100 CEO Survey was conducted by Business Advantage International between November 2023 and January 2024. The survey included senior executives from a representative sample of PNG’s largest companies, across all sectors of the economy. For the full survey report, visit www.businessadvantagepng.com/the-png-100-ceo-survey/.

For analysis by Westpac’s Senior Economist Justin Smirk of this year’s results and what trends they reveal, click here.