Chief financial officers in Asia are more optimistic than their counterparts in the U.S., Europe and Latin America, according to the latest Duke University/CFO Magazine Global Business Outlook Survey.
Wages in the region are expected to jump 7 percent, as is capital spending. Employment will increase by only 1.7 percent.
CFOs are concerned about the difficulty hiring and retaining qualified employees, wage inflation, weak demand, government and regulatory policies and economic uncertainty.
The effects of "Abenomics" are waning, as optimism in Japan has fallen below that in the rest of Asia. Top concerns are rising input costs, economic uncertainty and government policies. In the face of difficult economic times, half of Japanese companies would reduce hours worked or temporary workers, and 43 percent would delay maintenance or investment.
If the minimum wage increased by 40 percent in Asia, 36 percent of affected firms across the region would reduce current employment (67 percent in China). Across Asia, three-fourths would reduce future hiring (nearly 90 percent in China).
Three-fourths acknowledge that higher wages would increase worker productivity. However, more than 75 percent of affected companies would shift towards labor-saving technologies.
Of those who have already or soon will shift towards labor saving-technologies, the need for workers is reduced by about 15 percent.