Business confidence in Asia edges up

The YPO Global Pulse Confidence Index for Asia found that business leaders in Asia were holding a more cautious outlook than their counterparts in the United States but were more optimistic than chief executives in the European Union. 
For the first time since October 2015, Asia lagged behind the YPO Global Pulse composite score, which reflected an upswing in confidence to an optimistic 62.2. 
There were significant differences in sentiment within each market across the region, although the major economies remained relatively steady in their economic outlook. 
Confidence among business leaders in China remained stable at 61.3, compared to 61.4 in the third quarter. 
While India reported a 3.2-point drop in confidence to 62.8, it remains the most confident of Asia’s economic powerhouses. 
Economic confidence in Japan rose 3.2 points to 58.3, its second straight increase, following the depreciation of the yen and the government’s monetary policy.
The YPO Global Pulse Confidence Index’s quarterly electronic survey, conducted in the first two weeks of last month, gathered answers from 1,514 YPO chief executive officers across the globe, including 189 in Asia and 60 in Australasia.
The emerging economies across Asia reported greater fluctuation in economic sentiment. 
During the third quarter of 2016, the economic outlook in Asean slumped to its lowest level in the seven-year history of the YPO Global Pulse but bounced back in the final quarter, surging 9.4 points to end 2016 at 62.0, its highest level since April 2015.
Malaysia, Singapore and Vietnam all saw marked improvements in economic sentiment.
“It’s encouraging to see that the outlook is still firmly optimistic in each of the major markets and that confidence has quickly returned to most of the developing economies in the region. 

Protectionism 
“Clearly there will be some concerns about the potential impact of a more protectionist US economic policy on global trade and a strong US dollar, and chief executives in Asia will be monitoring the situation carefully over the coming months,” Patrick Siewert, managing director of Carlyle Group and YPO chair of North Asia, said yesterday. 
“For the most part, the signs are encouraging for economies across Asia in 2017, and business leaders will be keen to take advantage of the current favourable economic conditions.”
Globally, the YPO Global Pulse Index for the fourth quarter of 2016 climbed 3.0 points to 62.2, its highest level in two years. 
The United States reported the highest levels of confidence in the world, increasing by 4.2 points to 64.6, its highest since January 2015. Confidence in the EU remained steady, edging up to an optimistic 60.9. 
Confidence increased in Latin America by 2.4 points to 58.3 and in the Middle East and North Africa by 5.6 points to 59.5. 
Africa reported a 0.8-point decline, landing at 54.7, making it the second-least confident region in the world after non-EU Europe, where confidence increased 2.5 points to 54.3.
In Asia, the three key indicators in the YPO Global Pulse Index – sales, hiring and fixed investment – all increased last quarter.
The YPO Sales Index for Asia edged up 0.4 point to 66.9, the YPO Employment Index rose 1.3 points to 56.8 and the YPO Fixed Investment Index jumped 2.6 points to 64.2. 
Two-thirds of chief executives expected to increase sales this year, versus only 7 per cent who expected a decline in revenues. 
Similarly, more than a third expected to increase headcount in the coming 12 months, while 10 per cent predicted a reduction in staff numbers. 
Finally, more than half expected to increase fixed investment in the coming year, with only 5 per cent predicting reduced investment. 
Confidence surges within Asean. The YPO Global Pulse Index for Asean countries – Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei, Myanmar, Cambodia, Laos and Vietnam – rebounded 9.4 points to 62.0.