Business activity increased in first quarter

Business activity in the tourism, construction, wholesale, and retail sectors increased during the first quarter of 2015, according to a regular survey by the central bank.

The Maldives Monetary Authority’s (MMA) conducted its quarterly business survey from March 25 to April 7 with respondents from 77 enterprises.

“Looking ahead, business in all sectors except for the tourism sector, are predicting further improvements in business activity in Q2-2015 when compared to Q1-2015,” the report states.

“With regard to the current level of employment, businesses across all sectors indicated an increase in Q1-2015 compared to Q4-2014.”

Businesses in all sectors, except tourism, anticipated increases in hiring in the next quarter, “reflecting the optimism shown by majority of businesses in this quarter.”

The majority of businesses in the wholesale and retail trade sector and construction sector reported no price changes in the first quarter compared to the last quarter of 2014, while businesses in the tourism sector reported an increase.

“Looking ahead, majority of businesses in all sectors expect prices to remain the same except for the tourism sector, where prices are expected to decline,” the survey found.

“As for business costs, businesses across all sectors experienced an increase in all labour-related costs and other input costs (except for the construction sector which reported a decline) in Q1-2015 when compared to Q4-2014. Looking ahead, all sectors—except for businesses in tourism sector which expects a decline in other input prices—anticipate a further increase in all business costs in Q2-2015 as well.”

Tourism businesses meanwhile expect total revenue, resort bookings, and average room rates to decline in the next quarter with the end of the peak season.

Resorts and hotels reported “insufficient demand, labour market difficulties, such as shortages in both skilled labour and local labour, and the weaknesses in the regulatory framework” as factors that limit growth.