Trading conditions improve for businesses

Businesses in Fiji continue to experience improved trading conditions with most firms reporting increased revenue, profitability and hiring intentions.

According to ANZ’s senior economists Tom Kenny and Dr Kishti Sen, their surveys show that expectations of future sales, revenue and profitability look encouraging with 81 per cent of firms expecting to see increased turnover and nearly 88 per cent of enterprises reporting expectations of improved profitability over the year ahead.

The report states that as a result, businesses are adding capacity to service the anticipated increase in demand and with the economy regaining momentum, capex plans are back on the table.

It also stated that despite a slow build investment in new buildings and structures and in plant and equipment (P&E) was expected to increase over the next 12 months.

Dr Sen and Mr Kenny highlighted that remittances from relatives living abroad have, in recent years, significantly lifted boosting household income.

With remittance flows accounting for about 15-20 per cent of household budgets it may soften as families and friends visit Fiji instead.

The authors also noted that pandemic-related stimulus payments to Fijians residing in other countries had also been flowing to Fijian households, and were likely to diminish as those economies tighten.

“That said, we don’t expect remittances to fall off a cliff.

“Indeed, resilient labour markets in remittance source markets, loss of population through net overseas migration and employment opportunities such as the Australian Pacific Labour Mobility program are likely to put a floor under any fall of income received from abroad.”