NNA survey: Japanese firms in Asia foresee worsening business sentiment in 2019

07, Jan. 2019

TOKYO, NNA – Business sentiment among Japanese firms in Asia is expected to worsen this year, hit by the lingering U.S.-China trade dispute, an NNA survey showed.

Of the 630 respondents working for Japanese companies across East Asia, Southeast Asia, India and Australia, 21.0 percent said economic conditions would deteriorate in 2019, up sharply from 4.8 percent a year earlier, according to the survey conducted from Nov. 26 to Dec. 9.

On the other hand, 25.7 percent said the economic outlook would improve this year, down from 37.0 percent a year before.

The survey showed 43.3 percent of the respondents in China expected an economic downturn. Negative responses came to 51.4 percent in Hong Kong, 48.0 percent in Taiwan and 53.8 percent in South Korea.

Over 40 percent in China and Hong Kong and more than 30 percent in Taiwan cited the trade war as the main cause for concern.

In Southeast Asia, 10.8 percent said business sentiment would worsen, up from 3.9 percent a year earlier, while 30.7 percent said sentiment would improve, down from 41.3 percent a year ago.

Respondents in India and Vietnam had the most positive outlook among the 15 economies covered in the survey, with 64.2 percent in India and 61.5 percent in Vietnam saying business conditions would improve despite the drag from the trade row.

In India, only 5.7 percent said business sentiment would exacerbate. “GDP growth and the growth outlook for each sector remains strong and we also feel such a momentum in our daily operations,” a Japanese employee at a manufacturer said.

“The government will aggressively take economic stimulate measures ahead of the general election” scheduled between April and May, a respondent in non-manufacturing sector in India said.

Vietnam, a manufacturing hub in the region, is seen benefiting from the trade row as higher U.S. duties on Chinese imports is prompting the relocation of factories from China.

Respondents in Vietnam who expected a better outlook totaled 61.5 percent, up from 56.4 percent a year earlier.