Optimism Among Asia's CFO Flat But Reasonably Strong

Optimism among Asia's Chief Financial Officers is flat but reasonably strong, finds the the latest Duke University/CFO Magazine Global Business Outlook quarterly survey.

 

While optimism among Asian CFOs (excluding Japan) is 62 out of 100, Japanese CFOs are much less optimistic than their peers, rating their optimism at 49.

 

Eighty-six percent of Asian companies plan to pay bonuses, but these will be smaller at 45 percent of firms.

 

Employment will increase by about 2 percent on average in China, 0.2 percent in Japan and by 5 percent in the rest of Asia, say CFOs in the region. Wages are expected to rise by about 7 percent in Asia, except in Japan, where wages will remain flat.

 

Top external worries among Asian CFOs include global economic instability and intense price pressure. Top internal concerns include maintaining profit margins, difficulty attracting and retaining skilled workers and employee morale.

 

Territorial disputes with China have adversely affected the business prospects of many Japanese firms. Three-fourths of Japanese companies say their capital spending plans have declined due to the Chinese dispute (22 percent say the decrease is moderate or worse), and half say that hiring plans have been negatively affected.

 

Chinese companies have also been affected, although not as severely, with 45 percent saying the dispute has led to curtailed spending plans. Only 15 percent say the dispute has affected hiring.

 

Nearly 90 percent of CFOs in Japan say restrictions on the use of electricity (due to natural disasters and their impact on nuclear power production) have affected their companies. Nearly 40 percent say these negative effects have been moderate or worse.

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