Optimistic Asia Gains Momentum
Generally Asian businesses are feeling buoyant about the future of the region, reflected by the Thomson Reuters/INSEAD Asia Business Sentiment Index climbing six points to 71 in June, its highest level in five quarters and the third consecutive quarterly rise.
Of the 91 companies that participated in the poll, 43.9% were positive about their outlook, while 53.8% were neutral. Only 2.2% reported a negative outlook. The results are summarised as follows.
Australia
Business confidence among companies in Australia continued to improve in the second quarter, driving the country's sentiment index to its highest level since the first quarter 2012, although more participants were worried about the global economy.
Of the 14 respondents, seven companies were positive, while the other seven were neutral about the business outlook. In the previous quarter when there were eight respondents, two were positive and six were neutral.
Eleven respondents said world economic uncertainty was their top worry, much more than those in the March survey. Six companies reported that their new orders increased, while seven said orders were the same.
China
Corporate sentiment in China remained subdued after a drop in March, as companies worried about global economic uncertainty and rising costs. All 11 respondents were neutral on their business outlook, with the index flat at a record low of 50.
Five companies cited the world economy as their biggest concern, three blamed rising costs and one cited regulatory uncertainty. Three said they saw increased orders, while seven said new orders remained the same.
India
Worries about rising costs continued to weigh on business sentiment in India, pulling the index down to its lowest level since December 2009.
Of four respondents, two were positive, one neutral and one negative - the first time a company reported a negative response since the December 2011 survey. Three companies said rising prices were the biggest challenge, while one cited other risks.
Two companies saw rising costs as a worry, while the other two were concerned about currency volatility and global economic uncertainty respectively. Two companies said new orders were higher, while one said sales decreased.
Japan
Business sentiment in Japan jumped to its highest level in three years, although companies were still worried about global economic uncertainty, volatile currency fluctuations and rising costs.
Of the 19 respondents, five were positive on the outlook and 14 were neutral. In the previous survey, only one out of 22 participants was positive.
Seven companies said their biggest concern was the world economy, while five voiced concerns about currency volatility, and two saw rising costs as the main risk.
South Korea
Business confidence among companies in South Korea significantly improved in the June quarter, climbing to the highest level since the second quarter of 2011.
Of seven respondents, five were neutral about their outlook and two were positive. It was the first time companies reported positive responses in a year.
A majority of six said the global economy was their top business risk, while one saw foreign exchange volatility as a concern.
Taiwan
Taiwan's corporate sentiment index pulled back from a one-year high in the last quarter, as global economic uncertainties made their impact felt.
Only one out of three respondents was positive in their outlook compared with three positive responses out of four in the previous survey. The other two were neutral.
All three participants saw economic uncertainty as the biggest risk. Only one company reported increased orders, while two said sales remained the same.
Southeast Asia
Business confidence in Southeast Asia was mixed in the second quarter, with Indonesian companies unanimously positive, and Thailand's sentiment index dropping to an all-time low.
Indonesia, the region's largest economy, improved significantly in business confidence, as all nine respondents were positive in their outlook, up from three in the previous quarter.
Of six companies in Thailand, five were neutral and one was negative compared with one out of five respondents with a positive outlook in the previous three months.
Singapore's confidence improved from the previous reading of 61, with four companies still concerned about the global economy.
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