Business confidence in Asia rebounds in 3Q, but outlook slips in Australasia

HONG KONG: YPO, the premier leadership organization for chief executives in the world, reported today that confidence among business leaders in Asia crept up in the third quarter of 2017 (3Q 2017).

The YPO Global Pulse Confidence Index for Asia climbed 1.3 points to 62.8, making Asia the third most confident region, after the United States (63.5) and Australasia (63.3), remaining firmly in optimistic territory and suggesting that economic conditions in Asia are stable, although there were strong variances among the major economies in the region.

China reported a big upturn in sentiment, jumping 8.8 points to 68.0, its highest level since April 2013, while Japan dropped 3.9 points to 50.6, its lowest level for five years.

Confidence in India remained steady, edging up 0.5 point to 65.9, lower than that of China for the first time in over a year but still positive. The region’s emerging economies showed a definite improvement, and confidence in the Association of Southeast Asian Nations (Asean) jumped 3.0 points to 63.8.

“Once again, chief executives across the region remain positive about growth opportunities for in the short- to medium-term,” said YPO member, and CEO and President of PBM Polytex, Amit Gopal Patodia.

“With commodity prices continuing to rise and moderate GDP growth forecast for 2018 and beyond, business leaders will be keen to take advantage of the current economic climate. However, they will undoubtedly be keeping a close eye on the socio-political landscape.”

The majority of respondents predicted that business conditions would improve over the next six months, versus only 10 per cent who believed that the economic environment would deteriorate. Regarding the three key indicators of the survey, namely sales, employment and fixed investment, business leaders continued to be optimistic about the prospects for their own organizations over the next 12 months.

Asia was the most confident region in the world for sales outlook, with 63 per cent of respondents expecting to increase revenue over the coming year, and only 5 per cent predicting a decline in turnover.

Employment confidence jumped 3.6 points to 58.9, its highest level since July 2014, with 57 per cent of respondents expecting their workforce to remain the same, over a third (38 per cent) expecting to increase headcount, while 5 per cent predicted cuts. This was an improvement from 2Q 2017, when only 28 per cent predicted a greater headcount 12-months hence.

For fixed investment, confidence climbed 3.6 points to 62.9, reversing most of the 3.9-point decline in the 2Q. Almost half (48 per cent) of respondents expected to increase fixed investment spending, and only 8 per cent predicted a reduction in investment levels. - Bernama