Optimism among Asian business leaders fell to a record low even as forecasts signal that economic growth will accelerate in the region.
Only 28 percent of regional business leaders were “very confident” their companies will see revenue growth in next 12 months, down from 46 percent a year ago, according to an annual survey by PwC of executives attending the Asian Pacific Economic Cooperation.
Concerns about China’s slowdown and the market turmoil stemming from the plunge in Chinese stocks this summer took their toll on confidence, the survey said.
The world’s second-biggest economy is set to expand at the slowest pace in a quarter-century this year. Fears of a hard-landing for the Chinese economy helped fan the stock market selloff that roiled world financial markets and wiped about $4 trillion from the value of the country’s stock markets.
Even so, there are signs that the slowdown in Asia has bottomed out and growth will pick up in 2016. The economic expansion in the Asia-Pacific region will likely accelerate to 3.4 percent in 2016 from 3.1 percent this year, Denis Hew, APEC’s policy support director, said at a briefing in Manila. Growth was 3.4 percent last year.
Despite their pessimism, 53 percent of the executives surveyed said they planned to increase investment in the next 12 month, with 68 percent of the funds directed at the APEC region.
"On a positive note, in so far as their investment is concerned, investment is now more dispersed probably because also of the slowdown in China," said Alexander Cabrera, chairman of PwC Philippines. “China, the U.S. and Indonesia remain the main sources of growth not far behind Vietnam and Philippines and Thailand.”