Fragile economic upturn continues in Asia Pacific: ACCA
By Digital News Asia June 2, 2015
- Sharp decline in new hires in APAC since Q4 2014, 50% of respondents report staff cuts
- APAC only region YoY capex improved, SEA only region to see QoQ improvement
THE economic upturn in countries in Asia is still fragile, according to the largest regular global survey of finance professionals.
The Global Economic Conditions Survey for the first quarter of 2015, carried out by ACCA (the Association of Chartered Certified Accountants) and IMA (the Institute of Management Accountants) showed that while Asian finance professionals were more confident and forecast improved orders, they were less positive about investments in employment.
“Asian responses showed continued improvement in Q1 2015 (first quarter of 2015) although the pace of improvement has slowed slightly,” said ACCA Malaysia head David Chin (pic above).
“Asia Pacific was the only region where capital expenditure responses improved year-on-year while South-East Asia was the only region which saw a quarter-on-quarter improvement in available investment capital,” he added.
The report further states that trade and GDP (gross domestic product) outlooks in the region could be impacted by lower oil prices since many countries are net oil exporters.
As for increased costs, half of the finance professionals surveyed in the Asia Pacific region felt that costs were in fact rising, suggesting that inflation is a growing concern, ACCA said in a statement.
There has also been a sharp decline in new hires since Q4 in the Asia Pacific region too, where things are looking gloomier on the employment front compared to three months ago, with 50% of respondents from the region reporting staff cuts.
Out of all the other regions in the survey, there was greatest concern with customers going out of business in the Asia Pacific region, with 23% of respondents worried.
On a global scale there are clearer signs that the situation is improving, ACCA said. For the second quarter in a row, senior finance professionals are beginning to sense that a recovery is taking hold.
While the report shows that confidence is at the highest level among chief financial officers (CFOs) since 2011, the recovery is still a ‘work in progress,’ the ACCA said in its statement.
For example, while the report showed that capital spending and capital investment had fallen back, globally more money was being invested in staff, and there were signs of growth in employment and new orders.
Globally, respondents were also reporting fewer problems with late payments and fewer had concerns about suppliers or customers going out of business.
The report also showed that CFOs of larger companies were more pessimistic than those working in smaller businesses. This may be because they are more likely to be international, and therefore more likely to be exposed to uneven recovery and economic performance in different markets, ACCA said.
“Confidence is returning to the business sector – but there is a recognition that there is still a way to go before the global economy can be said to have made a full recovery,” said Raef Lawson, IMA vice president of research and policy.
“Amidst improving confidence it is encouraging to see that businesses are investing in people – the key element to any future success.
“However, the optimism is tempered by continuing uncertainty. Geopolitical instability in Ukraine and Russia and conflict in areas of the Middle East continue to cast long shadows over the global economy,” he added.
To download the report, go here.
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