As the global recession slowly recedes, so is optimism across most economies in Asia, finds CFO Innovation Asia’s Business Outlook Survey for the First Quarter of 2010.
Garnering responses from 205 CFOs, finance directors, controllers and other senior executives across Asia from December 23, 2009 to January 10, 2010, the survey suggests that while the majority of the executives surveyed (54%) are more optimistic today about their local economy compared to the last quarter, the numbers are still lower than in the previous survey in fourth quarter 2009. The fall in optimism is most evident among respondents in China (69% more optimistic and very optimistic vs. 80% in the previous survey) and in Singapore (70% vs. 80%). But optimism has improved in Hong Kong, although the level is still below those in other markets (46% vs. 38%).
Despite the waning optimism across most economies, the respondents are slightly more optimistic about the prospects for their own company. The survey says that six out of ten (62%) say they are more optimistic or very optimistic about the performance of their company, compared with 53% who said the same in the previous survey.
As for spending, while the majority of businesses in Asia will continue to trim capital spending (19%) or keep it at current levels (42%), 40% will increase such investments (previous survey: 33%). But 60% of respondents say their company will keep R&D spending unchanged, with 16% saying it will even decrease.
As investments increase, so will hiring, as four out of ten respondents (42%) expect employee numbers to rise in the next 12 months, up from 33% who said the same in the previous survey. There is also positive news about wages and salaries as six out of ten (61%) respondents expect compensation to rise, compared with just 43% in the previous survey.
Going forward, companies plan to expand into new markets and refocus on sales and marketing. The survey finds that a large majority (75%) rank expansion into new consumers segments and/or geographical markets as a top three strategic priority, much higher than the 56% who did the same in the previous study. Five out of ten (54%) will renew the focus on sales, marketing and distribution, while 44% will strengthen managerial and operational capabilities for the post-crisis world.