Sharp drop in Asean, Thailand business optimism

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

Thailand showed a much larger drop than the global change from 43 per cent to 35 per cent and the Asean decline, which was fairly sharp from 56 per cent to 23 per cent.

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

"After an uncertain first half, many accurately predicted the rise of optimism in the third quarter," Ian Pascoe, managing partner at Grant Thornton, said yesterday.

Asean business confidence has fallen to its lowest level since the second quarter of 2012, chiefly because of falling confidence in Indonesia and Thailand.

In Thailand, enthusiasm for military rule seems to be waning as the percentage of businesses citing regulations/red tape as a constraint was up 16 percentage points to 45 per cent – the same level as before the military coup. Economic uncertainty has also climbed steadily over the past three quarters.

In Indonesia, confidence dropped 34 percentage points to 14 per cent following the increase in fuel prices, which could scare businesses about further contraction or reduced consumer demand. About 64 per cent of businesses fret about rising energy costs and shortage of orders.

Overall, global economic optimism went down 8 percentage points to 35 per cent, due to falling oil prices.