Asia’s CFOs Less Optimistic About Economy

Optimism among Chief Finance Officers in Asia averaged 59 out of 100 in the 4th quarter, ranging from 30 in Malaysia to 45 in Singapore, 54 in Japan and 70 in China, according to the Duke University/CFO Global Business Outlook Optimism Index. Indian optimism fell from 65 to 52 this quarter.

In the previous quarter, Asian optimism averaged 65 out of 100, ranging from 40 in Singapore, 48 in Japan and 55 in Malaysia to 65 in India and 70 in China.

Two-thirds of Asian CFOs indicate that high corporate debt levels will dampen capital spending, though capital spending should still rise by an average of about 3.2 percent over Asia. Capital spending will fall in Japan.

Wages should rise by nearly 6 percent in Asia, with growth of 3 percent in Japan versus 7.6 percent in China. Full-time employment will rise 6 percent in Asia.

Top concerns include economic uncertainty, weak demand, government policies, difficulty attracting and retaining qualified employees, and currency risk.

Twenty-seven percent of Chinese firms believe that new anti-corruption measures will improve competitiveness among Chinese firms; however, nearly half say that the measures have caused Chinese firms to become too cautious.

Sixty-four percent of Japanese firms say that the new corporate governance code has had a positive effect on their companies, though only 35 percent say it has improved competitiveness.

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