(For the latest business outlook survey q1 2010 click here)
Hope for the best, prepare for the worst – that appears to be the mantra of Asia’s senior business executives going into the fourth quarter of 2009. It’s a theme that pops out clearly in the inaugural CFO Innovation Asia Business Forecast Survey, the first in a series of quarterly surveys sponsored by SAP. Conducted from September 23 to October 9 this year, the study polled 160 CFOs, finance directors, controllers and other senior executives across Asia.
The survey finds that 61% of business executives are more optimistic today about their local economy compared with their outlook in the third quarter. Another 4% even say they are ‘very optimistic.’ The respondents are also positive about the prospects for their company, though not to the same high degree. But while the majority anticipate rising sales, earnings and new orders, they will also keep capital spending, R&D and marketing and advertising at current low levels, or even cut back on these expenditures.
They are, in other words, cautiously optimistic. “The opportunity continues to be there,” says Manjit Singh, CFO for Singapore and Malaysia at Leo Burnett, the global advertising giant. “We are already starting to see positive consumer sentiment in terms of spending. Barring any surprises at the global economic level, we should start seeing companies budgeting appropriately next year.”
But, he adds, discretionary spending at his company will remain tight and control measures will stay in place. That’s the hallmark of business planning at Leo Burnett for 2010. “We have to make sure we are not going into a ‘W’ cycle,” says Singh, referring to the possibility of a double-dip recession. “We will be in a better position to evaluate whether the market is positively recovering by the middle of next year.”