Small to Medium Enterprises (SME’s) remain resilient against the slowing economy according to the Business Council of PNG 1st Quarter Business Report.
The report states that SME performance has seen sales being gradual, investment being modest and employment remaining constant.
This is despite corporates sales performance dropping by 30 per cent on the back of limited foreign direct investment, limited participation in Public Projects, FOREX shortages and hostile compliance rules.
The result of the SME’s resilience will see the sector continue to grow due to their flexibility in adapting and adjusting its business models and the limited requirement on foreign currency.
The quarterly report states that the demand on import substitution and local content are positive sigs for SMEs and they should capitalize on this demand.
Top Corporates will continue major adjustments in their business models and will see further impacts in consumer behavior, unemployment and investments.
The report further says unemployment withdrawals of superfund are expected to remain high and therefore government policy should capture them in starting up ventures.
This does not negate the fact that liquidity in the market is sufficient to drive domestic investments and agriculture seems to be a strong contender for this, but will always have the old challenge of security and regulatory support.