Business sentiment among Asia’s top companies edged up in the first quarter.
According to intellectual property company Thomson Reuters, solid improvement in the Philippines and South Korea outweighed weakness in China, India and Australia amid persistent concerns over the global economy.
The Asia business sentiment index broke two consecutive quarterly declines and rose to 64 in the first quarter of this year from 62 in the fourth quarter of 2013. A reading above 50 indicates an overall positive outlook, its survey says.
Uncertainty about the global economic outlook and rising costs remained the biggest risk factors for the region’s firms, according to the survey, which also found sentiment in the auto, retail and resource sectors improved, while confidence among companies in the building sector tumbled.
Business sentiment in the Philippines rebounded the most in the first quarter of 2014. Most companies in the country reported higher numbers of new orders and staff levels as massive rebuilding efforts, including the government’s $3.1 billion spending plan after a devastating typhoon in early November, are set to help sustain strong economic growth this year.
Overall sentiment in Southeast Asia’s $15 trillion economy was mostly positive, with Thailand being the only country in negative territory due to the lingering political turmoil.
In export-reliant north Asia, Japan and South Korea showed a solid recovery as they reported increased orders.
By sector, the retail industry showed a big improvement. In a sign of growing confidence in the sector, Asia’s top apparel retailer, Japan’s Fast Retailing, is among global retailers expanding aggressively in Asia, with plans to boost sales in Greater China by more than 30 per cent this year.
“A recovering economy has contributed to the rosier performance of retailing in developed countries in Asia,” said Euromonitor International analyst Honey Lim.
“In addition, the completion of new and revamped malls in the city centre and suburbs has supported value growth of retailing in Singapore in 2014. High rental costs, particularly in Singapore and Hong Kong, also drove prices upwards as retailers pass increasing costs to end-consumers.”