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Business confidence levels in Southeast Asia have fallen, according to CEOs.
Findings from the Young Presidents’ Organisation (YPO)’s Global Pulse Confidence Index revealed business sentiment in the Southeast Asian market (Indonesia, Malaysia, Philippines and Thailand) dropped 8.5 points over the past year to 60.1.
This was the region’s lowest level in the five year history of the index.
The report highlighted the slump to be the result of capital outflows, reduced liquidity and currency depreciation brought about by higher long-term interest rates in the United States.
However, despite this decrease, overall business confidence levels in Asia still rose for the second consecutive quarter, gaining another 3.5 points to land at 63.6.
The report attributed this overall increase to the rise in business confidence for Japan, China and India against a backdrop of stimulative government policy and encouraging economic data.
In addition, business leaders in Asia expressed strong confidence in their ability to grow sales, with nearly three-quarters (74%) expecting turnover increases of at least 10% over the next 12 months.
Similarly, a majority (54%) planned to step up fixed investments and more than a third (36%) intended to hire more workers.
“CEOs in the region are encouraged not only by the Bank of Japan’s quantitative easing programme, but also the economic reforms announced by China in November and signs of economic resurgence in India,” Terry O’Connor, regional chief executive officer of Courts Asia and executive member of the YPO Singapore Chapter, said.
Globally, too, the report highlighted “a rising tide of optimism” in business sentiments amongst CEOs, except in Africa and Australasia, where CEO sentiment edged lower from already-lofty levels.
The global index stands at 63.0, according to the survey.
The YPO report canvassed 2,088 chief executive officers across the globe, including 198 in Asia.