Uncertainty the key challenge facing Pacific businesses
As the impact of COVID-19 continues to be felt, 93% of Pacific businesses reported that not knowing how long the crisis will last is their main challenge.
The results have been published in the fourth PTI Pacific Business Monitor Report. The PTI Pacific Business Monitor is a regular survey that tracks the sentiment of businesses from across the Pacific region.
The fourth survey of businesses from across the Pacific region found that businesses across multiple sectors continue to be hit hard by the pandemic in a variety of ways, particularly by the closing of international borders and travel restrictions. Uncertainty and having no definite timeline is extremely challenging for businesses said Caleb Jarvis, Trade & Investment Commissioner, Pacific Trade Invest (PTI) Australia.
“The uncertainty of how long COVID-19 will last continues to have an immense impact, 93% of businesses said this was their major challenge and it has been consistently the top challenge faced by businesses since our first survey in March 2020.
“Although the Pacific remains relatively COVID-19 free this uncertainly is fuelled by the changing situations globally. Here in Australia where we thought we had the pandemic under control, Melbourne has gone back into lock-down and Sydney is dealing with managing a small outbreak. It puts back into question when international travel can safely resume making it extremely difficult for businesses in the Pacific to plan forward especially industries such as tourism that are reliant on borders being open. We can see this reflected in when business predict that will get back to businesses as normal with one-quarter of businesses unsure and 20% not expecting their revenue to return back to pre-COVID-19 level until 2022 or later.”
Over half of business continue to require financial support, and positively, over one third are now reporting that their government has provided assistance. This has steadily increased since our first survey where only a quarter reported that their government had provided some support. Despite this, satisfaction with government response remains relatively low (especially in Tonga and PNG).
Businesses across the Pacific continue to be in survival mode with 49% of businesses continuing to reduce operational costs to minimise the cost/damage to their business. Caleb Jarvis said there are signs that businesses are adjusting to the new normal.
“Even with 88% of businesses reporting a decline in their revenue, it’s encouraging to see that the number of businesses reporting that are reducing working hours and staff numbers have decreased, which shows a small number of businesses are beginning to find stability and a new way of operating. 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 mental health halving since the last survey and positive sentiments of feeling optimistic and happy increasing from the last survey.
“The private sector will be key to rebuilding Pacific economies. As we can see through the global uncertainty COVID-19 has created - it’s going to be a very long road ahead. As a network PTI is committed to keep monitoring the impact of COVID-19 has on businesses in the Blue Pacific and continue to inform governments, donors and stakeholders of the realities that the Pacific’s private sector is facing.”