Business confidence inches higher despite poor Pacific outlook

Negative economic growth will likely continue well into next year even as Pacific businesses' optimism about their future rises slightly, analysis by the Pacific Trade Invest (P.T.I.) has found. 

In its final Pacific Business Monitor for the year, P.T.I. reports businesses continue to have cashflow problems in the wake of global uncertainty under COVID-19.

P.T.I. Australia’s Trade and Investment Commissioner Caleb Jarvis said his organisation will continue to “champion” the region’s private sector as it faces widespread difficulties.

This last monitor report is based on survey data taken between the end of November and mid-December from 113 businesses across the Pacific. 

The survey's findings show 89 per cent of businesses are being “very negatively impacted” by the pandemic, a rise of four percentage points from the survey prior. 

The same proportion of businesses are reporting declining revenue, the survey found, while 92 per cent report the pandemic has impacted the entire local economy.

There appears to be a slight growth in business confidence, however: some 56 per cent of businesses are somewhat confident their operations will survive through COVID-19.

This is a rise from 53 per cent in the previous survey, and from 49 per cent in the survey before that. 

“In line with rising confidence in business survival, the proportion of businesses expecting to return to business as usual in the first half of 2021 has increased to 19 per cent (up from 15 per cent [in the last survey conducted])," the report states. 

“A quarter are unsure (down from 31 per cent [during the last survey])."

Business owners say the most significant challenges to improving their performance are caused by closed national borders. 

A total of 44 per cent of the businesses surveyed reported there were barriers to their business surviving.

Of those, 18 per cent said a lack of Government support or stimulus was a major barrier, the lowest number of respondents to say so during the survey series.

Otherwise, poor cash flow, uncertainty about the crisis' length and import costs remain among businesses' top concerns. 

More than half of all respondents said they need financial support such as grants or payment deferrals, while 42 per cent said they needed immediate cash flow assistance. 

Asked whether they had accessed Government support already, 64 per cent said their Governments had offered “some” support. But 19 per cent reported they are “extremely dissatisfied” with the Government response to the pandemic.

As well as the economic impacts on business, the survey asks owners about their mental health and wellbeing.

“The proportion of businesses reporting a very negative impact on community wellbeing has declined to 35 per cent (down from 39 per cent last [survey]) and is the lowest [level] since reporting began,” the report states.

“The negative toll on mental health has remained stable since [our last survey], with 62 per cent continuing to report a negative impact on their mental health.

“COVID-19 continues to have a significant impact on business decision-makers’ personal financial situation; however, those reporting a very negative impact declined to 46 per cent, the lowest since reporting began.”

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