Domestic consumption and the ‘Go Local Fiji’ initiative have really helped this economy going.

This was the comment made by the ANZ Fiji Country Head Saud Minam in relation to the ANZ Research, Pacific Private Sector Survey on Fiji’s non-tourism economy improved through 2020 that was released yesterday.

The report compiled by ANZ’s International Economist Kishti Sen and Senior International Economist, Tom Kenny highlighted:
– Fiji’s non-tourism economy improved through 2020 Fiji’s non-tourism economy – made up of retail and wholesale trade, manufacturing, construction, agriculture, and the information, communication & telecommunication industry performed reasonably well in the second half of 2020, according to our survey of the nation’s private business activity over the December quarter.
– Demand for these (largely) service providers actually improved, with fewer firms reporting a deterioration in sales or profitability in the second half of the year.

Several factors helped prevent a deeper downturn: government income support payments, early access to superannuation savings, record money transfers from abroad, financial help for small and medium enterprises and a pivot to construction projects, in particular a boost to first homeowner grants.

In a positive sign for future conditions, fewer businesses in the non-tourism economy reported a pessimistic view of the next 12 months, and sentiment around employment and investment improved.

Tourism Economy Remains Negative With Little Surprises
The senior economists said: “Closed borders have squeezed tourism, but demand for the accommodation, transport and other related services began to increase in the quarter 4 due to the promotion and discounting of the ‘Love Your locals’ programme.

“Still, most tourism businesses report a deterioration in profitability and job losses,” the researchers said.

Mr Minam said: “With arrival of COVID-19 vaccine we can see light at the end of tunnel (opening of borders).

“Businesses adopted new norms which were not easy but resulted in good activities,” he said.

Lift In New Hires Will Precede Recovery In Capex
The senior economists highlighted:
– Sentiment on future profitability of the tourism sector has continued to climb, no doubt buoyed by vaccine developments.
– Employment intentions begun to improve in quarter 3, 2020, probably in the hope of an imminent Pacific tourism bubble.
– Without quarantine-free travel in place, however, expectations for more jobs in the sector turned negative in quarter 4.

“Capital expenditure plans were also unsurprisingly on hold tourism operators are likely to hold off on big-ticket expenditure until there is more information about when international travel can return to Fiji,” the researchers said.

“That will give businesses certainty around demand, revenue and profitability, which is a necessary precondition for new investment.”

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