Asia's CFOs Worry About Price Pressure, Weak Consumer Demand in 2010

Price pressure, weak consumer demand, and intense domestic competition are the top three external concerns for Asian CFOs in 2010, finds the recent Duke University/CFO Magazine Global Business Outlook Survey.


The survey concluded December 11, 2009 and generated responses from 1,431 CFOs, including 567 from the U.S., 184 from Europe, 334 from Asia (not including China), and 346 from China.


However, despite the concerns, 74% of Asia's CFOs (excluding China) are more optimistic about the economy of the country where they are based compared to the previous quarter (third quarter of 2009). Over in China, 62% of the CFOs say they are also more optimistic compared to the previous quarter. According to CFOs, Asian economies look far stronger than the U.S. and Europe.


Top company-specific concerns among Asian and Chinese CFOs include maintaining profit margins and difficulty attracting and retaining qualified employees. Employee morale is fair or poor at one-third of Asian firms (not including China) and fair or poor at 55% of Chinese firms. Only 12% of Chinese companies report good or excellent employee morale.


About 71% of Asian and Chinese CFOs say they'll increase workforce if demand for their product increases in 2010.


As for corporate financing through bank borrowing, nearly 40% of Asian CFOs report that banks are more willing to lend today relative to before the financial crisis, while only 20% report banks are less willing to lend. In China, only three percent of firms report bank lending has worsened in the past two years.


Meanwwhile, Asian firms expect capital spending to increase by more than 15%, domestic employment by nearly five percent and earnings by nearly 20%.



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