Big positive shift in Asia Q1 Business Sentiment Index

Thu Mar 22, 2012 3:54am EDT
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By Aditi Shah and Naomi Tajitsu

MUMBAI/WELLINGTON (Reuters) - Business sentiment among Asia's top companies improved dramatically in the first quarter following three straight quarterly declines, buoyed by signs of recovery in the United States and some steadying of Europe's debt crisis.

But concerns persist over rising costs and the state of the global economy.

The quarterly Thomson Reuters-INSEAD Asia Business Sentiment Index jumped to 74 from 57 in the fourth quarter of 2011. The index was the highest since the first quarter of last year. A reading above 50 indicates an overall positive outlook.

More than half the companies that responded to the survey said their outlook for the next six months was positive compared with fewer than a third in the fourth quarter.

The index was compiled between March 12-19 from a poll of more than 100 senior executives at Asia's top companies representing industries from autos and banks to technology, resources and property. It was the first poll conducted by Thomson Reuters in association with INSEAD, a global management and business school in Singapore and France.


"Last year, there was all this talk about Europe blowing up and hard landings in the United States and China. Some of those fears have faded," said Shane Oliver, chief economist at AMP Capital Investors in Sydney.

"It's the whole package of better news about the global economy which has probably led to improved sentiment. It would be wrong to say it was just Europe, or just the U.S," said Oliver, noting markets have improved, there is additional liquidity and the cost of funding has leveled off or come down.   Continued...