Significant drop in business optimism: survey

 Although a decrease in optimism was a common finding amongst most of those surveyed, Thailand showed a considerable difference with a 44 per cent point drop from 71 per cent in the third quarter to 27 per cent in the fourth quarter.

It shows a much larger drop that the global change (43 per cent to 35 per cent) and deeper than the Asean drop, which itself was fairly sharp (56 per cent to 23 per cent). 

Profit growth expectations in Thailand (down 38 percentage points to 27 per cent), China (down 33 percentage points to 13 per cent) and the US (down 23 percentage points to 34 per cent) have seen similar falls.  

Ian Pascoe, managing partner for Grant Thornton, said that this is not totally unexpected.

"After an uncertain first half, many accurately predicted the rise of optimism in the third quarter. While that saw the emergence of a receptiveness to new and exciting business opportunities, after such a sustained period of uncertainty, businesses are now practising a degree of caution for the coming year. This would seem well placed given the global challenges we are facing in 2015. The headwinds for Thailand continue to be considerably stronger than the tailwinds this year however our strongest concerns for the year ahead come from global issues," he said.

The IBR shows that global business optimism for 2014 stood at an average of 41 per cent compared to 28 per cent in 2013 and just 12 per cent in 2012. But in the fourth quarter, global optimism dropped from 43 per cent to 35 per cent, driven by steep falls in the US (down 10 percentage points to 59 per cent), China (down 30 percentage points to 25 per cent) and Japan (down 12 percentage points to -12 per cent).

“We saw the highest levels of business confidence since 2007 over the past 12 months, but looking ahead,there are a number of potential flashpoints which are threatening global economic stability. The volatility in the oil price is of particular concern to global markets: prices have dropped to five-year lows in December and while cheaper oil will benefit net importers and industries such as manufacturing and transport, it is already spelling trouble for energy companies and key markets such as Russia and the Middle East,” Poscoe said.