Business optimism on the rise

The quarterly survey of more than 3,000 businesses in 44 countries showed that this optimism was reflected by Thailand businesses, rising from 40 per cent to 42 per cent.

 

The report also found those intending to increase hiring in APAC countries rose to 43 per cent from 38 per cent, with Thailand placed second in the world with 72 per cent of businesses planning to increase hiring (up from 68 per cent).  APAC country businesses planning to increase employee wages at, or above inflation, increased from 60 per cent to 76 per cent -- in Thailand that number rose from 36 per cent to 52 per cent.

 

With regard to inflation (number of businesses planning on increasing product prices), 42 per cent of businesses in APAC countries plan to do so (up from 37 per cent), but in Thailand, the number fell from 54 per cent to 44 per cent.

 

Ian Pascoe, Managing Partner at Grant Thornton said “These figures reflect the energy and dynamism that all businesses here in the Thailand and ASEAN markets are currently experiencing. However they also emphasise a few important key considerations too. Productivity has to improve in almost all areas as businesses will have to do more with less. Related to this, finding key people will get progressively harder and will require careful succession planning. Meanwhile growth opportunities are fuelling an appetite for both domestic and cross-border mergers and acquisitions which require careful strategic consideration before and integration work after, in order to be successful.”

 

Globally, IBR indicates that businesses in mature economies are betting on future growth, finally releasing their cash reserves and beginning to invest again. This comes as global business optimism, spurred on by improving order books, is up to its highest level since early 2011. The investment mood change is welcome evidence of businesses deciding that now is the time to lay the foundations for growth.

 

IBR data reveals that business leader investment plans, particularly in mature economies, have leapt sharply over the past three months. In the European Union (EU), 44 per cent of business leaders now plan to increase investment in plant and machinery in the coming year, up from 26 per cent three months ago. Businesses in the G7 (34 per cent, up 7 percentage points), North America (33 per cent, up 5) and the PIGS economies (42 per cent, up 27) all report strong rises in investment expectations.

 

Most Optimistic countries                                 

1. Peru  98 per cent

2. Philippines 92 per cent

3. UAE  92 per cent

4. Mexico  84 per cent

5. India  83 per cent

 

Businesses increasing hiring

1. India  76 per cent

2. Thailand 72 per cent

    Georgia  72 per cent

3. Peru  68 per cent

4. UAE  58 per cent

5. Philippines 56 per cent

    Turkey  56 per cent

 

Ian Pascoe added: “The survey results reflect optimism that the world’s largest economies and those which have suffered the most in the last few years are unified by an outlook brighter than we’ve seen for some time. Fears around the ‘fiscal cliff’ dampened US business confidence in Q4 and avoiding it gave a boost to businesses – although the sequester of automatic spending cuts has since come into effect. In Japan, there is clearly a feeling that the new prime minister and governor of the central bank can return the economy to growth. China meanwhile looks set to outstrip its growth targets in 2013. So whilst that optimism is encouraging, it is tentative, and we would still advise caution as these events mature.”