Business confidence down in Asia amid global uncertainty
SINGAPORE — Asia’s top companies, especially those in export-oriented economies, including Singapore, were more wary in their business outlook for the third quarter, due to concerns over uncertainty in the global economy.
The latest Thomson Reuters/INSEAD Asia Business Sentiment Index fell to 66 in the third quarter from 71 in the second quarter, when it reached the highest level in more than a year.
An index reading above 50 indicates an overall positive outlook.
It surveyed more than 100 executives from 90 major companies in 11 Asia-Pacific countries.
The downbeat sentiment is mainly due to volatility in both advanced and emerging economies, said INSEAD Economics Professor Antonio Fatas.
“The US and Europe are not recovering fast enough and we’re also seeing worrying signs coming from the emerging markets over the past month. The combination of low growth in advanced economies and a potential crisis in emerging markets would suggest a weaker global economy,” he said.
Concerns over global economic uncertainty were felt most strongly among Asia’s export economies of Singapore, Taiwan, South Korea, Malaysia and Indonesia, which posted the weakest readings. Those from China and Japan were unchanged.
Companies in Singapore registered a reading of 50, compared with 83 in the second quarter, the index showed.
The data came a day after International Enterprise Singapore announced an unexpected 6.2 per cent on-year decline in non-oil domestic exports (NODX) last month.
The weak figure had surprised most economists, who were expecting exports to grow amid a gradual improvement in the global economy. But that recovery has been slower than expected and markets are bracing for further volatility due to the impending tapering of quantitative easing in the United States.