MMA reports increased business activity in second quarter

All sectors of the domestic economy with the exception of the tourism industry reported increased business activity in the second quarter (Q2) of 2014, according to the Maldives Monetary Authority’s (MMA) Quarterly Business Survey.

“With regard to the current level of employment, businesses across all sectors, except for those in the tourism sector, indicated an increase in Q2-2014 compared to Q1-2014,” the report observed.

“Looking ahead, all sectors anticipate an increase in employment in Q3-2014, reflecting the optimism shown by majority of businesses towards improved activity levels in this quarter.”

While businesses in the construction sector reported an increase in prices, the report noted that businesses in the wholesale and retail trade, manufacturing and tourism reported a fall in prices.

“As for business costs, businesses across all sectors experienced an increase in all labour related costs and other input costs in Q2-2014 when compared to Q1-2014, while they expect a further increase in costs in Q3-2014 as well.”

In the construction industry, the survey found that factors which limit growth opportunities included “delays in payment by clients and cost of raw materials.”

“Other significant factors include limited access to bank credit and foreign exchange, high cost of labour and finance; and shortage of materials,” the report noted.

The quarterly survey is conducted by the central bank for a “quick assessment of current business trends and expected future economy activity” by questioning senior managers “on the direction of change in various business variables such as sales, output, prices, exports, capacity utilisation and employment”.

“Survey forms were sent out to 135 large enterprises in four main sectors of the economy which are construction; manufacturing; tourism; wholesale and retail trade. A total of 65 enterprises responded to the survey which represents an overall response rate of 48 percent,” the report explained.