What does the 2024 PNG 100 CEO Survey tell us? [analysis]


While business confidence is largely sustained in this year’s PNG 100 CEO Survey, there are rising concerns about several business impediments. Westpac Senior Economist Justin Smirk provides his analysis of this year’s survey results.

Westpac’s Justin Smirk providing analysis of the PNG 100 CEO Survey to members of the Port Moresby Chamber of Commerce and Industry this week. Credit: Godfreeman Kaptigau/BAI

While profits in 2023 fell short of expectations for PNG’s leading companies, CEOs are nevertheless expecting profits to improve in 2024. Meanwhile, recruitment and investment expectations for this year have held onto most of their 2023 improvement.

This year’s survey was conducted from November 2023 to January 2024, with most respondents surveyed before the 10 January outbreak of civil unrest in Port Moresby. Despite that, 88 per cent of respondents said security/law & order was either mission critical or very important to their businesses (up from 65 per cent last year). It is not unreasonable to think firms would be even more concerned if the survey was re-run post-January.

Meanwhile, concerns about inflation lifted to the highest level in the history of the survey, suggesting inflation is a significant issue, even if it did not make the top six.

From the 2024 survey, we have identified five key highlights:

1. Profits are expected to grow but, given the disappointment of last year, expectations have moderated for 2024.

While the profit outlook remains positive, it has taken a hit from the difficulties experienced in 2023, resulting in a muted outlook for 2024.

The Profit Expectation Index, which tracks CEOs’ profit expectations, eased back to 47.2 in 2024, down from 77.8 in 2023. This is below the longer-term average of 65.8.

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Our Profit Outcomes Index, which measures what CEOS tell us actually happened with their profits, fell to 5.4, below its long-term average of 7.5.

2. Despite lower-than-average profit expectation, recruitment and investment confidence held up.

In the 2024 survey, the Recruitment Expectations Index eased back to 75.7 from a historical high of 84.6 last year, with the share of those expecting either a substantial or slight increase in staff falling slightly from 64.1 per cent to 62.1. Nevertheless, at 75.7 the index is well above the long-run average of 47.9, consistent with non-minerals employment growing through 2024.

Investment might be a bit softer than it was in 2023, when the Investment Expectations Index rose to 97.4, the highest since 2019 and well above the long-run average of 65.0. This year, it fell to 83.8.

3. The 2024 Business Conditions Index is positive but not as strong as 2023.

Westpac combines the expectations for profits, investment and recruitment into a single index, the Business Conditions Index.

The Business Conditions Index softened in the 2024 survey, falling back to 68.9 from 93.3 in 2023 which was the strongest result since the first survey in 2012.

With the index holding above its long-run average, we believe this to be a positive sign, particularly for non-minerals growth.

4. The lack of foreign exchange is back as the top impediment.

CEOs’ forex concerns lifted to 4.6, the highest reported level of concern in the history of the survey – 93.9% reported forex was a mission critical or very important concern.

5. Security/law & order, unreliable utilities and the lack of government capacity are all significant hindrances.

Security/law & order have been a consistent issue. Even before the recent Port Moresby riots, the level of concern lifted to 4.4, on par with the previous high in 2013.

Since 2019, the concern about unreliable utilities has been high but relatively stable. However, in 2024, it jumped to the highest level of concern for utilities in the history of the survey. Eight-eight per cent of CEOs reporting the unreliable utilities were a mission critical issue or very important concern.

Concern about the lack of government capacity jumped to 4.2, also the highest level in the history of the survey. Over 80 per cent of CEOs said it was a mission critical or very important concern.

Justin Smirk is Senior Economist at Westpac. To request a free copy of this year’s survey results and analysis, visit the PNG 100 CEO Survey page.

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