Maldives: Quarterly Business Survey - 4Q 2016

Transcription

1. VOLUME 4 ISSUE 4
2. About the survey The Quarterly Business Survey is conducted by the MMA with the aim of obtaining a quick assessment of current business trends and expected future economic activity . The respondents of the business survey are senior managers or top management of businesses who has an overall view of the business situation. The questions cover the views of the senior management (for the past quarter and expectation for the next quarter) on the direction of change in various business variables such as sales, output, prices, exports, capacity utilisation and employment which are useful for analysing and predicting economic activity. The qualitative response for these questions takes the form of either increase, decrease or no change. The business survey for Q4-2016 was conducted from 22nd December 2016 to 10th January 2017. Survey forms were sent out to 143 large enterprises in the construction; tourism and; wholesale and retail trade sectors. The survey sample is based on information provided by the Maldives Inland Revenue Authority. A total of 88 enterprises responded during the survey period which represents an overall response rate of 62%. The accounting concept, net balance approach, has been used in converting qualitative responses to quantitative numbers. All responses are weighted based on their relative size within their respective sector. Net balances measure the difference between the percentage of respondents who gave positive responses and the percentage of respondents who gave negative responses. Care should be taken when interpreting the results of individual sectors as constraints in sample selection limit the representativeness of certain industries within each sector. The MMA would like to thank all the parties who contributed to the survey, especially the survey respondents.
3. Summary of survey results According to the Quarterly Business Survey carried out for the fourth quarter of 2016 , businesses across all sectors surveyed, namely tourism, construction, and wholesale and retail trade reported an increase in the level of business activity in Q4-2016 compared with Q3-2016, as indicated by positive net balances. Looking ahead, businesses in all the three surveyed sectors also predict an improvement in their business activity in Q1-2017 when compared with Q4-2016. With regard to the current level of employment, the majority of businesses in all the surveyed sectors reported no change in Q4-2016 over Q3-2016. Meanwhile, businesses in the construction and the wholesale and retail trade sector expect an increase in the level of employment in Q1-2017 compared with Q4-2016 while most of the respondents in the tourism sector anticipate no change. As for business costs, most of respondents across all surveyed sectors reported no change in labour costs in Q4-2016 compared with Q3-2016 and also expect no change in labour costs in Q1-2017 over Q4-2016. Looking at other input costs, majority of respondents in the construction and the wholesale and retail trade sector reported an increase in Q4-2016 over Q3-2016 while most of the businesses in the tourism sector reported no change. Meanwhile, businesses in the tourism; and the wholesale and retail trade sector anticipate input prices to increase while most of the businesses in construction sector expect no change in Q1-2017 compared with Q4-2016. With regard to prices charged, most of the businesses in the tourism and construction sector reported an increase while majority of the businesses in the wholesale and retail trade sector reported no change in Q4-2016 compared with Q3-2016. Similarly, the tourism and the construction sector anticipate an increase in the prices in Q1-2017 over Q4-2016 while the wholesale and retail trade sector expects no change.
4. Summary of responses by sector Construction sector Current situation In the construction sector , 40% of respondents indicated an increase in the volume of construction activity while the remaining respondents reported no change in Q4-2016 compared with Q3-2016. Similarly, during the same period, 29% of respondents indicated an increase in volume of orders received while 53% of respondents indicated no change. Regarding employment numbers, majority of respondents indicated no change in Q4-2016 compared with Q3-2016 (net balance of 14%). As for the business costs, the majority of respondents reported no change in labour costs in Q4-2016 compared with Q3-2016. However, 74% of businesses reported an increase in input prices during the same period. Reflecting the increase in input prices, 57% of businesses indicated an increase in the prices charged by them in Q42016 compared with Q3-2016. With regard to the financial situation of the company, 44% of businesses reported that it worsened while 32% of businesses reported an improvement in Q4-2016 compared with the previous quarter (Figure 1). Meanwhile, 80% of respondents indicated that access to credit had tightened in Q4-2016 compared with Q3-2016 (net balance of -70%). Expectations for the next quarter Looking ahead, most of the businesses in the construction sector expect the volume of construction activity and the volume of incoming orders to increase in Q1-2017, when compared with Q4-2016, as indicated by the positive net balances (Figure 2). Reflecting the positive outlook for activity levels, 57% of 1 | Quarterly Business Survey, Q4-2016 Figure 1: Changes in business indicators in Q4-2016 compared with Q3-2016 Volume of construction activity Volume of orders received Number of employees Prices charged on average Wages and other labour costs Price of inputs Capital expenditure Access to credit Financial situation of the company -100 -80 -60 -40 -20 0 20 40 60 80 100 * Changes in business indicators are shown as net balances. This is the difference between the percentage of business units choosing positive answers (increase/better/ease) and that choosing negative answers (decrease/worse/tight). ** Detailed survey responses are provided in Table 1 of appendix.
5. businesses expect an increase in their employment in Q1-2017 over Q4-2016 . However, the remaining businesses anticipate no change in employment. Looking at prices charged, 72% of businesses expect an increase in Q1-2017 while 26% of businesses expect to see no change during the same period. As for business costs, 37% and 25% of businesses anticipate an increase in labourrelated costs and input prices, respectively, while the remaining businesses reported no change in labour and input costs. As for investment plans, 69% of businesses plan to increase their capital expenditure while the remaining businesses expect no change. Forty-four percent of businesses expect their financial situation to worsen in Q1-2017 compared with Q4-2016, while 32% expect an improvement. Meanwhile, 80% of respondents anticipate access to credit to further tighten in Q1-2017. Factors limiting business growth As per the survey respondents, the most significant factor that limits business growth in the construction sector is the limited availability of foreign exchange. Additional factors noted by the respondents include delays in payments by clients, cost of raw materials, access to bank credit and shortage of skilled labour (Figure 3). Figure 2: Expectations on changes in business indicators in Q1-2017 compared with Q4-2016 Volume of construction activity Volume of orders received Number of employees Prices charged on average Wages and other labour costs Price of inputs Capital expenditure Access to credit Financial situation of the company -100 -80 -60 -40 -20 0 20 40 60 80 80 90 100 Figure 3: Significant factors limiting business activities in Q4-2016 Access to foreign exchange Delays in payment Cost of raw materials Access to bank credit Shortage of skilled labour Shortage of materials Cost of labour Cost of finance Shortage of local labour Regulatory framework Competition Insufficient demand 0 10 20 30 40 2 50 60 70 100 | Quarterly Business Survey, Q4-2016
6. Tourism sector Current situation Reflecting the commencement of the peak season for the tourism industry , most respondents from the tourist resorts indicated an increase in total revenue and resort bookings in Q4-2016 compared with the previous quarter―net balances of 88% and 17%, respectively (Figure 4). Looking at average room rates, 91% of respondents reported an increase in Q4-2016 compared with Q3-2016. As for employment numbers during the period, 75% of respondents indicated that it remained the same while 22% reported an increase. As for business costs, 71% and 64% of businesses reported no change in labour-related costs and input prices, respectively. During the review quarter, 45% of businesses indicated improvement in their financial situation; recording a net balance of 34%. Meanwhile, 87% of respondents reported no change in access to credit in Q4-2016 over Q3-2016, while 11% reported an increase. Expectations for the next quarter Looking ahead, most of the businesses in the tourism sector expect total revenue, resort bookings and average room rates to increase in Q1-2017 compared with Q4-2016, as indicated by positive net balances of 70%, 72% and 69%, respectively. Majority of respondents expect the number of employees on the payroll to remain unchanged during Q1-2017 while 18% expect an increase. As for the average room rates, 82% of the respondents expect it to 3 | Quarterly Business Survey, Q4-2016 Figure 4: Changes in business indicators in Q4-2016 compared with Q3-2016 Total revenue Resort bookings Number of employees Average room rate Wages and other labour costs Price of inputs Capital expenditure Access to credit Financial situation of the company -100 -80 -60 -40 -20 0 20 40 60 80 100 * Changes in business indicators are shown as net balances. This is the difference between the percentage of business units choosing positive answers (increase/better/ease) and that choosing negative answers (decrease/worse/tight). ** Detailed survey responses are provided in Table 1 of appendix.
7. increase in Q1-2017 . Looking at business costs, 56% of the businesses anticipate no change in labour costs while 47% of businesses expect input costs to increase in Q1-2017 compared with Q4-2016 (net balances of 37% and 39%, respectively). With regard to future investment plans, 22% of the respondents plan to increase their capital expenditure in Q1-2017 compared with Q42016 (net balance of 10%). Fifty-three percent of respondents expect their financial situation to improve in Q1-2017 compared with Q4-2016, while 47% of respondents anticipate no change during the same period. As for access to credit, 87% of businesses expect no change in access to credit in Q1-2017 over Q4-2016 (net balance of 8%). Factors limiting business growth In analysing the factors which limit growth opportunities for businesses in the tourism sector, the most significant factor highlighted by the businesses was competition within the sector. Additionally, insufficient demand, cost of labour, limitations in the regulatory framework and shortage of local labour were also reported as some of the constraints (Figure 6). Figure 5: Expectations on changes in business indicators in Q1-2017 compared with Q4-2016 Total revenue Resort bookings Number of employees Average room rate Wages and other labour costs Price of inputs Capital expenditure Access to credit Financial situation of the company -100 -80 -60 -40 -20 0 20 40 60 80 100 Figure 6: Significant factors limiting business activities in Q4-2016 Competition within the sector Insufficient demand Cost of labour Regulatory framework Shortage of skilled labour Shortage of local labour Cost of finance Access to bank credit 0 10 20 30 40 4 50 60 70 80 90 100 | Quarterly Business Survey, Q4-2016
8. Wholesale and retail trade sector Current situation According to 87 % of respondents in the wholesale and retail trade sector, the total volume of sales increased in Q4-2016 compared with Q3-2016 (net balance of 78%). Looking at the volume of orders placed with suppliers, 82% of businesses reported an increase in Q4-2016 over Q3-2016 (net balance of 71%). As for employment, 86% of businesses indicated no change in hiring while the remaining businesses reported an increase in Q4-2016 (Figure 7). Looking at prices charged, 81% of businesses reported no change in their selling prices in Q4-2016 while 14% reported an increase. As for business costs, most of the businesses reported no change in labour costs while cost of sales increased in Q4-2016 over Q3-2016. Meanwhile, majority of the businesses reported that the financial situation worsened in Q4-2016 compared with Q32016 (net balance of -41%). Fifty-two percent of businesses indicated easier access to credit in Q4-2016 compared with the previous quarter (net balance of 31%). Expectations for the next quarter Looking ahead, more businesses in the wholesale and retail trade sector expect the volume of sales and volume of orders placed with supplier to increase in Q1-2017 compared with Q4-2016, recording net balances of 79% and 77%, respectively. Sixty-three percent of businesses also expect higher 5 | Quarterly Business Survey, Q4-2016 Figure 7: Changes in business indicators in Q4-2016 compared with Q3-2016 Total volume of sales Volume of orders placed with suppliers Volume of stock Number of employees Average selling prices Wages and other labour costs Cost of sales Capital expenditure Access to credit Financial situation of the company -100 -80 -60 -40 -20 0 20 40 60 80 100 * Changes in business indicators are shown as net balances. This is the difference between the percentage of business units choosing positive answers (increase/better/ease) and that choosing negative answers (decrease/worse/tight). ** Detailed survey responses are provided in Table 1 of appendix.
9. employment in Q1-2017 while the remaining businesses expect no change in hiring . As for selling prices, 85% of respondents expect it to remain the same while 12% of the businesses expect it to increase. Looking at business costs, 76% of respondents expect labour costs to remain the same while 71% expect cost of sales to increase in Q1-2017 compared with Q4-2016. Regarding future investment plans, 75% of businesses anticipate an increase in their capital expenditure in Q1-2017 compared with Q4-2016. Meanwhile, 70% of businesses expect their financial situation to improve in Q1-2017 while 27% of the businesses reported no change (Figure 8). As for the outlook for access to credit, 51% of businesses expect easier access to credit while 18% anticipate further tightening in Q1-2017. Figure 8: Expectations on changes in business indicators in Q1-2017 compared with Q4-2016 Total volume of sales Volume of orders placed with suppliers Volume of stock Number of employees Average selling prices Wages and other labour costs Cost of sales Capital expenditure Access to credit Financial situation of the company Factors limiting business growth Businesses in the wholesale and retail trade highlighted insufficient access to foreign exchange as the most significant factors limiting their business growth. In addition, competition within the sector, rent and logistical constraints were also highlighted as significant factors limiting business growth (Figure 9). -100 -80 -60 -40 -20 0 20 40 60 80 100 Figure 9: Significant factors limiting business activities in Q4-2016 Access to foreign exchange Competition Rent Logistical constraints Cost of finance Shortage of skilled labour Access to bank credit Shortage of local labour Cost of labour Insufficient demand Regulatory framework 0 10 20 30 40 6 50 60 70 80 90 100 | Quarterly Business Survey, Q4-2016
10. Appendix Table 1 : Views on the direction of change in business indicators by sector Assessment of Q4-2016 compared with Q3-2016 Percentage of enterprises choosing Increase/ Better/Ease No change Decrease/ Worse/Tight Net balance Expectations for Q1-2017 compared with Q4-2016 Percentage of enterprises choosing Increase/ Better/Ease No change Decrease/ Worse/Tight Net balance Construction sector Volume of construction activity 40 60 0 40 70 25 6 64 Volume of orders received 29 53 18 12 63 21 17 46 Number of employees 23 67 9 14 57 43 0 57 Prices charged on average 57 41 2 55 72 26 2 69 Wages and other labour costs 31 69 0 31 37 63 0 37 Price of inputs 74 26 0 74 25 75 0 25 Capital expenditure 81 19 0 81 69 31 0 69 Access to credit 10 10 80 -70 10 10 80 -70 Financial situation of the company 32 25 44 -12 32 25 44 -12 Overall business situation 27 71 2 25 39 61 0 39 Tourism sector (resorts) Total revenue 91 6 3 88 84 2 14 70 Resort bookings 57 3 40 17 86 0 14 72 Number of employees 22 75 3 20 18 80 2 17 Average room rate 91 0 9 81 82 6 13 69 Wages and other labour costs 29 71 0 29 40 56 3 37 Price of inputs 36 64 0 36 47 44 8 39 Capital expenditure 35 56 9 26 22 66 12 10 Access to credit 11 87 3 8 11 87 3 8 Financial situation of the company 45 44 11 34 53 47 0 53 Overall business situation 60 28 11 49 64 28 9 55 *Percentages may not total 100 due to rounding. *Net balance is the difference between the percentage of business units choosing positive answers (increase/better/ease) and that choosing negative answers (decrease/worse/tight). 7 | Quarterly Business Survey, Q4-2016
11. Assessment of Q4-2016 compared with Q3-2016 Percentage of enterprises choosing Increase / Better/Ease No change Decrease/ Worse/Tight Net balance Expectations for Q1-2017 compared with Q4-2016 Percentage of enterprises choosing Increase/ Better/Ease No change Decrease/ Worse/Tight Net balance Wholesale and retail trade sector Total volume of sales 87 4 9 78 82 14 4 79 Volume of orders placed with suppliers 82 6 11 71 82 13 5 77 Volume of stock 79 10 12 67 74 24 2 71 Number of employees 14 86 0 14 63 37 0 63 Average selling price 14 81 5 10 12 85 2 10 Wages and other labour costs 14 86 0 14 24 76 0 23 Cost of sales 73 25 2 71 71 27 3 68 Capital expenditure 18 81 1 18 75 25 0 74 Access to credit 52 26 21 31 51 31 18 33 Financial situation of the company 13 33 54 -41 70 27 3 67 Overall business situation 73 20 7 66 75 24 0 75 Prepared by: Economic Research and Analysis Section, Maldives Monetary Authority Tel: (960) 332-8028 Fax: (960) 331-7604 Email: surveys@mma.gov.mv Website: www.mma.gov.mv 8 | Quarterly Business Survey, Q4-2016
12. Boduthakurufaanu Magu Male ’ - 20182 Republic of Maldives Tel: (960) 3312343 Fax: (960) 3323862 Email: mail@mma.gov.mv Website: www.mma.gov.mv