Asia firms’ sentiment rises to seven year high
TOKYO: Business confidence among Asian companies rose in October-December to the highest in almost seven years due to robust consumption and global trade, a Thomson Reuters/ INSEAD survey showed.
The Thomson Reuters/INSEAD Asian Business Sentiment Index, representing the six- month outlook of 94 firms, rose to 78 for the December quarter from 69 three months before. The index reached its highest since JanuaryMarch 2011.
A reading above 50 indicates a positive outlook.
Improvement in sentiment in Australia, China and South Korea drove gains in the overall index. Sentiment in Indonesia and Thailand was also strong, showing that many countries in Asia continue to benefit from accelerating global growth.
“The index shows that the slow strengthening that we have seen in the world economy has lifted business sentiment in Asia,” said Antonio Fatas, a Singapore-based economics professor at global
The index shows that the slow strengthening that we have seen in the world economy has lifted business sentiment in Asia.
business school INSEAD.
“Asia is a reflection of what is happening in the world,” he said.
The index measuring sentiment in Australia rose to a record high of 92 in October-December from 69 in the previous quarter. The country’s ruling coalition has recovered from a dual-citizenship crisis that threatened to throw policy-making into turmoil.
Signs of a rebound in consumer spending, Chinese demand for Australian metals, and growing capital expenditure in other sectors has also underpinned sentiment.
China, upon which much of Asia depends for trade, saw its subindex rise to 83 to reach the highest since the third quarter of last year.
The market reforms that Chinese President Xi Jinping laid out at the Communist Party Congress in October has fueled optimism that the world’s second-largest economy can manage a surge in house prices and credit growth.
South Korea’s subindex rose to 83 from 50 in the previous quarter to reach the highest since the second quarter of 2011, as international pressure has so far slowed the pace of North Korea’s missile tests for its nuclear weapons program.
The subindex for Indonesia slipped to 92 in the fourth quarter from 100 in the previous quarter but remained at a high level. Sentiment in Thailand and India improved, while sentiment in Taiwan fell to the lowest level in more than a year. Turn to Page B3, Col 1
Antonio Fatas, INSEAD economics professor