Sluggish Demand, Political Uncertainty Dampens Sentiment of Asian Businesses

Sluggish demand and political uncertainty have led to a dip in the business confidence of Asian companies, reports Reuters.

The Thomson Reuters/INSEAD Asian Business Sentiment Index, representing the half-year outlook of 118 firms, fell to 63 from 68 in the September quarter, although it remained above the 50 mark separating optimism from pessimism.

Thomson Reuters and INSEAD polled firms across Asia from Nov. 28 through Dec. 9. Of 118 respondents, just over 42 percent were positive toward business prospects over the next six months, 41 percent were neutral and 16 percent were negative.

Firms in Australia were the most positive with their subindex of 86 although that was still 2 points lower than three months prior. Only Singaporean firms were negative with a subindex of 46, albeit an improvement from the 38 of September.

Sentiment fell the most in the usually upbeat Philippines, to 70 from 94. Though optimistic, the subindex compared with that economy's average of 91 over the survey's seven-year life.

Sentiment also tumbled in China, to 80 from 90, in India to 70 from 75 and in Thailand to 60 from 72. But in South Korea it rose to 57 from 50 despite the political turmoil.

By sector, the retail and leisure subindex fell to 56 in the fourth quarter from 68 in the third. Household, food and beverage firms were the most optimistic at 79, up from 72, whereas those in the autos sector were the most pessimistic at 40 from 60.

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