Brand owners in mixed mood in Asia Pacific

16 September 2010

HONG KONG: Brand owners in Asia Pacific remain broadly optimistic about their future prospects, although significant differences are observable in different countries.

Reuters, the news agency, surveyed 59 leading corporations, and found its regular barometer of business sentiment fell from 78 points in the second quarter to 69 points at present.

This marked the first such decline in 18 months, and constituted a contraction on the record score posted during Q2 2010.

However, figures came in above 50 points, which would indicate an essentially static assessment of the current environment, suggesting an affirmative view survives.

More specifically, 24 respondents to Reuters poll agreed the six-month outlook was "positive", and a further six defined it as "very positive".

By contrast, 24 were neutral, and while only six assumed a negative position, this doubled the total delivered over the last round of research, conducted in June.

"The increased concern about a double-dip in the West, mainly the United States, coupled with a concern about how far Chinese policy makers will go with tightening measures are weighing on sentiment," said Kirby Daley, a senior strategist at Newedge Group.

Nearly 75% of organisations in the technology sector – a selection including Canon, Acer and Infosys – adopted neither a positive nor negative attitude, and just three took an upbeat stance.

A majority of financial services providers were similarly confident, but there was still a slight contraction on Q2 within this panel.

Elsewhere, 11 of the 18 Japanese operators featured, like Mitsubishi and Takeda Pharmaceuticals, thought demand would remain flat, supplemented by four anticipating a drop off.

"Japan is an outlier in Asia, as it has had a much more subdued recovery from the trough in early 2009, and it still has a lot of excess capacity, and is suffering from deflation," said Richard Jerram, head of economics at Macquarie Securities.

Half of Australian companies gave a neutral analysis, while three-quarters of the eight Chinese participants, and five of India's six representatives, supplied encouraging feedback.

All three airlines proved hopeful regarding the coming six months, largely thanks to rising levels of business travel locally.

"Two of the four food firms were neutral, one was positive and the other very positive, unchanged from Q2," Reuters added.

"That's no surprise given that food firms are benefiting from Asia's fast-growing and increasingly wealthy population."

Strong sales in India and China also generated favourable predictions among automakers, as these nations continue to drive global growth.

Data sourced from Reuters; additional content by Warc staff