Asian CFO Optimism Falters, But Hiring Forecast Stays Positive

by CFO Innovation Asia Staff, 11 June 2012

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Management

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business outlook capital spending corruption Global Business Outlook Survey worker productivity

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Asian CFOs who are growing more pessimistic outnumber those growing more optimistic by nearly a three-to-one margin. Asian optimism fell to levels last seen during the recent recession.

According to Duke University's Global Business Outlook survey, Asian optimism fell to 58 from last quarter’s 65.

Asian firms are concerned about intense price pressure, weakening demand, global financial instability and uncertainty, liquidity, governmental policies and low worker productivity and morale.

Wages are expected to rise 7 percent in Asia over the next 12 months, while full-time domestic employment should increase by 3 percent.

Capital spending will grow by 7 percent, while earnings will rise only 1 percent.

Unlike their Western counterparts, the typical Asian company plans to unleash cash over the next 12 months. The cash will be used for capital spending, acquisitions, marketing, paying down debt and increasing employee pay.

Meanwhile, business corruption is a big issue among 35 percent of Asian CFOs.

In terms of innovation, 39 percent of Asian companies devote a portion of their budget to pursuing major innovations. However, Asian firms plan to spend more (5 percent) of their total budget on transformational innovation.

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