Asia business confidence falters on China

HONG KONG: Asia has been a ray of sunshine in the global economic gloom, but a confidence survey released Wednesday shows the region's executives are starting to worry as China's growth slows and exports sink.

The YPO Global Pulse Index for Asia declined 1.8 points to 60.1 in the latest quarterly survey, its lowest level since it began three years ago.

The pollsters at the Young Presidents' Organization (YPO), a not-for-profit network of 20,000 chief executive officers, said Asia's confidence level showed a marked decline from previous years.

“During the first several quarters of the survey, Asian confidence averaged nine points higher than the global confidence index reading,” the YPO said in a statement.

Terry O'Connor, chief executive officer of retailer Courts Asia and chair of the YPO Singapore Chapter, said the results pointed to slower growth for a region that has so far weathered the global economic headwinds.

“Evidence of that trend accumulated during the past several months, as China reported that second quarter GDP growth fell to 7.6 percent, the Singapore economy actually declined last quarter, and South Korea and Japan both cut their full-year forecasts,” he said.

“Nevertheless, it is important to note that the forecast is for a slower pace of growth, not a contraction by any means.” The Global Index dropped 4.1 points to 59.7 in the July 2012 survey, following three quarters of rising confidence.

The United States recorded the sharpest drop of 5.1 points to 60. Confidence amongst young executives in the European Union slipped 2.8 points to 52.0, reflecting the ongoing debt crisis in the eurozone.

In Asia, confidence levels ranged from a high of 70 in Thailand and the Philippines to lows of near 50 in Japan and South Korea. In China, CEO confidence “plummeted” almost seven points to the upper 50s.

The results were based on responses from 1,659 chief executive officers in the first two weeks of July, including 193 in Asia.

AFP