According to the latest Thomson Reuters/INSEAD survey, the business morale among the Asian firms fell to its lowest since the 2008-09 financial crisis in the three months to June, in the face of the negative implications of the escalating US-China trade war.
“The Thomson Reuters/INSEAD Asian Business Sentiment Index tracking companies’ six-month outlook worsened in the three months ended June to 53, versus 63 in the previous two quarters.
The index staying above the neutral point of 50 suggests companies in the region are not expecting an imminent global recession, but the decade low indicates caution was rising as trade tensions mount.
Antonio Fatas, a Singapore-based economics professor at global business school INSEAD, noted: “There was a big dip (in the index) three quarters ago, and we felt it was the uncertainty about the trade war and people were worried about the future. We get a sense after four quarters of low numbers that now, it’s not just uncertainty. This is a true slowdown in growth. We see activity declining — it’s not just the expectation that activity will decline.”
Respondents to the survey included Japan’s Nikon Corp, South Korea’s Samsung Electronics, India’s Tata Consultancy Services and Reliance Industries Ltd, as well as Thailand’s PTT PCL.”