- Global survey finds ASEAN businesses set to benefit from global economic shift
New research from Grant Thornton’s International Business Report (IBR) reveals that global business optimism has declined back to 27%.
Optimism in Southeast Asia ticked up for the third straight quarter, boosted by Indonesia (78%) although Thai businesses (-20%) remain unsettled by ongoing political unrest.
This time last year, business optimism in the ASEAN economies stood at net 25%. However, the picture heading into 2014 is markedly different with optimism in the ASEAN rising to 45%, driven by improvements in Philippines (72% up to 90%), Vietnam (-10% up to 40%) and Malaysia (12% up to 20%). Indonesia saw a strong increase from 56% in Q3 to 78% in Q4 2013.
Ken Atkinson, Managing Partner at Grant Thornton, said: “We’re braced for a momentum shift in the global business dynamics as we enter 2014. Things seem to be improving quite markedly in ASEAN. The contrast from 12 months ago is stark – as business leaders plan for 2014, optimism in the ASEAN look more robust however uncertainty is growing in some countries."
It should however be noted that revenue prospects across the ASEAN have fallen by 59 percentage points over the past 12 months to 54%. In Vietnam, expectations for revenue growth have decreased from 90 percentage points to 52 percent over the same period.
Similarly, peers’ expectations for rising profits dropped in Vietnam (86% to 50%) Thailand (53% down to 16%), Singapore (46% down to 28%), Malaysia (56% down to 52%) and Philippines (66% down to 60%) compared with 12 months previously (Q4-2012). By contrast, Indonesia (70%) has the most optimism for increasing profitability.
Ken Atkinson added: “Twelve months ago, growth prospects in the ASEAN looked markedly different. More recently we have seen growth return to these economies as unemployment falls and consumer spending rises. Consequently businesses are seeing renewed demand for their goods and services but this does not appear to be translating into confidence in revenue or profit growth.”
Expectations for employment, investment and salaries have recovered (37%) in the ASEAN after a slowdown from Q1, 2013 to Q3, 2013. However Thai business leaders are more pessimistic than peers in Philippines (26%), Vietnam (32%) and Malaysia (36%). Thailand was gripped by riots also suffering that is stopping businesses from growing. “The hope is that we are moving toward a more balanced regional economy with fewer extremes. This should support business growth prospects; greater balance and less volatility means businesses can plan for the future and make decisions with greater certainty."
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Notes to editors
The Grant Thornton International Business Report (IBR) provides insight into the views and expectations of more than 12,500 businesses per year across 44 economies. This unique survey draws upon 21 years of trend data for most European participants and 10 years for many non-European economies.
Data collection is managed by Grant Thornton's core research partner – Experian. Questionnaires are translated into local languages with each participating country having the option to ask a small number of country specific questions in addition to the core questionnaire. Fieldwork is undertaken on a quarterly basis. The research is carried out primarily by telephone.
IBR is a survey of both listed and privately held businesses. The data for this release are drawn from interviews with 3,500 chief executive officers, managing directors, chairmen or other senior executives from all industry sectors conducted between November and December 2013.