Business optimism hits 2-yr high in Asia Pacific

Business optimism has hit a twoyear high in Asia Pacific, reflecting a buoyant mood across the region that is largely driven by positive prospects for increased trade, P&A Grant Thornton said in a report.

In the Philippines, the professional services firm said executives cited the three top opportunities in the country over the next five years as increased economic cooperation within the Association of Southeast Asian Nations (ASEAN); upgrading local infrastructure; and automation of simple business processes.

“Philippine businesses are increasingly optimistic about the national economy and plan to hire additional staff based upon an improving trade picture and increasing revenue expectations,” said Marivic Españo, P&A Grant Thornton chairperson and chief executive officer, in a statement to introduce the report.

Executives from other countries also cited increased ASEAN economic cooperation as a top opportunity in the region.

P&A Grant Thornton said 33 percent of business leaders across the Asia Pacific named economic integration as the biggest growth opportunity.

It said companies in other countries — including Australia, China and Japan — are particularly buoyant about this trend, “indicating that the ASEAN Economic Community is delivering tangible benefits inside and outside Southeast Asia.”

“Automation of simple business processes is cited the country’s and the region’s third-largest growth opportunity,” it said.

“Automation involves freeing up workers for higher valueadded tasks. As firms invest in technology-led solutions for lower-skilled roles, there is confidence that this should allow for great efficiencies,” it added.

But P&A Grant Thornton cited a warning from the World Economic Forum’s Global Competitiveness Index that many economies are ill-prepared for automation.

Across the region, the firm said levels of business optimism across had hit a net 41 percent in the third quarter of 2017, the highest since the second quarter of 2015.

In China, optimism reached a three-year high of 52 percent, while in Japan it has increased 23 percentage points compared to a year ago.

The positivity across the region also had a positive effect on employment as 40 percent of Asia-Pacific businesses expect to hire more people over the next 12 months.

“As you would expect across such a large area, there are multiple contributing factors driving positive sentiment,” said Rodger Flynn, Grant Thornton regional head for Asia Pacific.

“The powerhouse that is the Chinese economy is becoming much more outward-looking, reflected both in its One Belt One Road initiative and the movement of lower skilled jobs to neighboring countries. This outlook is having a positive trickle-down effect across the region,” he added.

“At the same time, our research shows there are signs that the ASEAN Economic Community, established in 2015, is boosting business growth opportunities. And the Trans Pacific Partnership, considered a non-starter following the change of administration in the USA, is still seen by many businesses leaders across Asia Pacific as an opportunity to strengthen trade ties and boost exports,” Mr. Flynn said.