Optimism among Chief Finance Officers in Asia averaged 58 out of 100 in the 1st quarter of the year, ranging from 45 in Singapore and 46 in Malaysia to 56 in Japan, 61 in China and 64 in India, according to the latest Duke University/CFO Global Business Outlook Optimism Index.
In the previous quarter, Asian optimism averaged 59 out of 100, ranging from 30 in Malaysia to 45 in Singapore, 54 in Japan and 70 in China.
Concerns dampening Asian optimism include economic uncertainty and currency risk.
Corruption a significant problem
The study highlights that about 70 percent of CFOs in India and The Philippines say corruption is a significant problem holding back the economy, and 40 percent of Chinese CFOs say the judiciary must be fixed.
Nearly 40 percent of Asian CFOs identify the corporate tax system, and 34 percent say other government regulations must be reformed to improve the economy.
Half of Asian CFOs, including two-thirds in Japan, say they lack the human capital necessary to respond rapidly to a sudden increase in demand. Seventy percent of Asian companies say that lack of public trust is moderately or greatly harming the business environment.
Capital spending should increase a robust 7.5 percent (median) across Asia, though by less than 2 percent in China, according to the study.
Employment and wages should both increase by about 5 percent in 2017, with wages increasing 2.5 percent in Japan versus 7.7 percent in China.
Fully 100 percent of Chinese CFOs say that air pollution harms the Chinese economy, with 29 percent saying the effect is very negative.
Half of Japanese CFOs believe the government's initiative to reduce work hours will improve worker productivity but only one-fourth think it will help the bottom line.