Global business survey finds strong economic indicators in APAC region
Information Technology Press Releases Wednesday April 17, 2013
Bangkok–17 Apr–Grant Thornton
Asia Pacific (APAC) business optimism increased strongly from 35% to 48% over the past three months according to the Grant Thornton International Business Report (IBR), a quarterly survey of more than 3,000 businesses in 44 countries. This optimism was reflected by Thailand businesses, rising from 40% to 42%.
The report also found those intending to increase hiring in APAC countries rose to 43% from 38%, with Thailand placed second in the world with 72% of businesses planning to increase hiring (up from 68%). APAC country businesses planning to increase employee wages at, or above inflation, increased from 60% to 76% — in Thailand that number rose from 36% to 52%.
With regard to inflation (number of businesses planning on increasing product prices), 42% of businesses in APAC countries plan to do so (up from 37%), but in Thailand, the number fell from 54% to 44%.
Ian Pascoe, Managing Partner at Grant Thornton said “These figures reflect the energy and dynamism that all businesses here in the Thailand and ASEAN markets are currently experiencing. However they also emphasise a few important key considerations too. Productivity has to improve in almost all areas as businesses will have to do more with less. Related to this, finding key people will get progressively harder and will require careful succession planning. Meanwhile growth opportunities are fuelling an appetite for both domestic and cross-border mergers and acquisitions which require careful strategic consideration before and integration work after, in order to be successful.”
Globally, IBR indicates that businesses in mature economies are betting on future growth, finally releasing their cash reserves and beginning to invest again. This comes as global business optimism, spurred on by improving order books, is up to its highest level since early 2011. The investment mood change is welcome evidence of businesses deciding that now is the time to lay the foundations for growth.
IBR data reveals that business leader investment plans, particularly in mature economies, have leapt sharply over the past three months. In the European Union (EU), 44% of business leaders now plan to increase investment in plant and machinery in the coming year, up from 26% three months ago. Businesses in the G7 (34%, up 7 percentage points), North America (33%, up 5) and the PIGS economies (42%, up 27) all report strong rises in investment expectations.
Most Optimistic countries
1. Peru 98%
2. Philippines 92%
3. UAE 92%
4. Mexico 84%
5. India 83%
Businesses increasing hiring
1. India 76%
2. Thailand 72%
3. Peru 68%
4. UAE 58%
5. Philippines 56%
Ian Pascoe added: “The survey results reflect optimism that the world’s largest economies and those which have suffered the most in the last few years are unified by an outlook brighter than we’ve seen for some time. Fears around the ‘fiscal cliff’ dampened US business confidence in Q4 and avoiding it gave a boost to businesses – although the sequester of automatic spending cuts has since come into effect. In Japan, there is clearly a feeling that the new prime minister and governor of the central bank can return the economy to growth. China meanwhile looks set to outstrip its growth targets in 2013. So whilst that optimism is encouraging, it is tentative, and we would still advise caution as these events mature.”