I?m calling it: PNG is on the up again

Image Credit: Aaron Chin (twitter.com/aaronchmgroup)

After months and months of talk about doom and gloom in Papua New Guinea, it’s time to put negativity aside and taking note of signs of improvement.  

It’s been less than 24 hours since Peter O?Neill was sworn back in as Prime Minister. While everyone is now asking what this will mean for the country as a whole, we may already know what this move will mean for the stability of the investment climate.

Politics aside, investors can now use the last four years? worth of government actions to predict exactly what they?re getting in to.  

On the business front: From the conversations I’ve had in Port Moresby with clients from a wide range of sectors, activity in PNG is beginning to pick up.

If the signs are correct, Q1 2018 should yield some serious momentum ? the likes of which we haven’t seen in a while.

If you?re still sceptical, I don’t blame you.

The last few years have been tough, (to put it lightly). Ongoing issues with the availability of foreign currency and tumbling commodities prices have meant major project plans, businesses and workforces have taken serious hits.

When any economy is facing uncertainty, it is difficult to identify a clear point in time where things start to take a turn for the better.

In Australia for example, the end of our mining and construction boom left states like Western Australia flowing with resources cash one second, high and dry the next. See if you can guess exactly when our ?boom? ended:

In our industry and in the Peopleconnexion office in particular, we have experienced both boom periods, and witnessed the aftermath of what happened here in Australia.

One of the most telling signs of recovery here in Queensland was an increase in clients? hiring activity and willingness to start re-planning their workforces, rather than increasing redundancies.

In reality, few companies invest in hiring, training and developing their workforce when times are tough. This is why recruitment activity is one way to gauge how an economy is tracking before official economic reports are released.

What’s happening in recruitment in 2017?

Business Advantage’s PNG 100 CEO Survey taken last year showed surprisingly positive sentiments in terms of recruitment. 

According to 100 of the men and women making these executive decisions, over 38% were planning to increase their staffing levels this year.

If the activity in our office is anything to go by, this has come to fruition. We are seeing some strong activity across:

?        Construction

?        Aviation

?        FMCG

?        Manufacturing

?        Logistics & distribution

?        Finance

As more investment in mining comes to fruition, these industries will continue to benefit and become stronger over the coming 18 months or so.

What commitments have we seen so far?

Over the past few months, we have finally seen some serious progression of mining and resources projects: 

(Image source)

If you?re still not convinced, look over these new GDP estimates

So far, new estimates put PNG’s 2017s GDP at 3.0%, despite predictions of 2.5%(shown below).

This revised estimate is on par with the growth forecasts for other countries in the Pacific region:

 

I?m keen to hear your commentary on this ? what signs of improvement are you seeing and what barriers are still standing in the way of progression?

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