Business sentiment among Asia's top companies fell for the second straight quarter, dragged down by export-orientated economies such as China and Japan, while domestic spending helped boost Southeast Asia's outlook, a Thomson Reuters/INSEAD survey showed.
Concerns over global demand are hurting Asia's export engines, with autos, technology and shipping sectors among the least upbeat in the survey. Sectors more exposed to domestic growth were much more optimistic.
Australia: improved
Company sentiment in Australia picked up compared with the previous quarter, but most participants cited the global economy as their biggest business risk. Of 14 respondents, two were negative, two positive and 10 were neutral. In the previous quarter, six were neutral, four negative and two positive.
Eight of the participants reported lower employment levels, while five said they remained the same. New orders increased for six respondents, stayed the same for five, and declined for three.
James Hardie , the world's largest manufacturer of fibre cement products, bank-insurer Suncorp and industrial property manager Goodman Group were among the companies that took part in the survey.
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China: new low
Chinese companies were the least optimistic since the survey began in 2009. Of six companies surveyed, four were neutral, one was positive and one was negative. In the previous survey, four were positive, while 13 were neutral and two were negative.
The majority of participants were worried about the global economy, while one cited rising costs. Employment levels stayed the same at five of the six respondents, while one reported a lower level. Casino operator Galaxy Entertainment Group Ltd <0027.HK> was among the respondents.
India: optimism grows
Indian companies grew more positive compared with the previous quarter. Of 10 Indian companies surveyed, six were positive and four were neutral. Economic uncertainty, rising costs and regulatory worries were the top risks. Employment levels stayed the same at nine companies.
Miner Coal India and drugmaker Dr Reddy's Laboratories were among those taking part in the survey.
Japan: lowest since Q4 2011
Japanese respondents turned pessimistic compared with the previous quarter for the lowest reading since the fourth quarter of last year. Nearly half of the respondents cited global economic uncertainties as their biggest concern. Of 20 companies surveyed, 17 were neutral, two negative and one positive.
Four respondents cited foreign exchange volatility as their main business risk. Employment level remained the same for 17 companies. Other threats cited included regulatory uncertainty, a delay in the release of products and a deterioration in the local economy.
Respondents included Canon Inc, Softbank Corp and Daiichi Sankyo.
South Korea: lowest since Q3 2011
The country's sentiment index hit its lowest level since the third quarter of 2011. Three of five respondents were negative about their outlook, while the other two were neutral.
Four respondents saw global economic uncertainty as their main business risk. Employment levels stayed the same for all five. Two respondents reported a decline in new orders, while the other three said they were unchanged. Respondents included Hyundai Heavy Industries.
Taiwan: pessimistic
Taiwanese companies shifted clearly into pessimistic territory, with one negative and four neutral responses. Three of the respondents saw global economic uncertainty as the biggest risk to their outlook, while one said cited rising costs.
Southeast Asia: most upbeat
Companies from Southeast Asia were decidedly optimistic, with the Philippines and Indonesia recording the highest scores. All nine respondents from the Philippines and three from Indonesia were positive about their outlook.
In Singapore, where sentiment improved from previous quarter, five of 10 companies surveyed were positive and the others were neutral.
Optimism among Thai firms eased compared with the previous quarter, with eight of the 11 respondents saying they were neutral on their outlook, while the other three were positive. Two of the four Malaysian companies surveyed were positive, while the remaining two were neutral.
Notes:
** Companies sampled for the survey may change from one quarter to the next.