Maldives Monetary Authority has revealed that business in different sectors predict improvement in their business activities in the final quarter of the year 2016.
According to the Quarterly Business Survey carried out for the fourth Quarter of 2016, businesses in construction sector, wholesale sector and retail trade sector reported an increase in the level of business activity in Quarter4 compared with Quarter3–2016.
In the construction sector, 40 percent of the businesses indicated an increase in the volume of construction activity. Regarding employment numbers, majority of respondents indicated no change in Quarter4 compared with Quarter3.
With regard to the financial situation of the company, 44 percent of businesses reported that it worsened while 32 percent of businesses reported that it gained profit. Meanwhile, 80 percent of respondents indicated that access to credit had tightened in Quarter4-2016 compared with Quarter3-2016.
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 difficulty in acquiring bank credit, delays in payments by clients, shortage of skilled labour, cost of raw materials and cost of finance.
Looking ahead, for the tourism industry, most respondents from the tourist resorts indicated an increase of 91 percent in average room rates in Quarter4-2016 compared with the previous Quarter. Only 9 percent of respondents reported a decrease in average room rates. Meanwhile, 88 percent of respondents reported an increase in resort bookings while 12 percent reported a decrease in Quarter4 compared with Quarter3.
During the review quarter, 45 percent of businesses indicated an improvement in their financial situation.
In analyzing 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 significant constraints.
According to 87 percent of respondents in the wholesale and retail sector, their businesses reported an increase in Quarter4-2016 compared with Quarter3.
As for employment, businesses indicated no change in hiring.
Businesses in the wholesale and retail trade highlighted insufficient access to foreign exchange and competition within the sector as the two most significant factors limiting their business growth. In addition, rent, cost of finance, shortage of skilled labor and limited access to bank credit were also highlighted as significant factors limiting business growth.
The Quarterly Business Survey is conducted by Maldives Monetary Authority with the aim of obtaining a quick assessment of current business trends and expected future economic activity.