Business optimistic despite economic slowdown: Survey

Written by:
Subscribe to Oneindia News

New Delhi, June 15 (UNI) Despite the current economic uncertainity, senior financial executives across Asia and Australia remain optimistic of the market as they actively look at expanding operations, besides investing in new production capacity and increasing headcount.

The 'American Express/CFO Research Global Business and Spending Monitor' survey reveals that executives also plan to allocate more capital to shareholders through dividends or share buybacks.

Companies in these regions are less pessimistic about the economy and their business prospects than their global counterparts, said the survey.

Eight out of 10 respondents from these regions expect their primary industry to grow and their company's revenue to increase over the next 12 months, it said. The study surveyed 370 senior financial executives from around the world.

''In India as elsewhere, rising energy costs are an urgent concern. While companies plan to be conservative in their spending, they're also looking to enhance investments in growth areas and are actively pursuing opportunities to expand market reach,'' American Express Head (Commercial Card-India) Firdaus Mogul said.

They are pursuing investments that will allow them to reach more customers in new and better ways, all in an effort to preserve the bottom line, while promoting top-line growth, he added.

This includes increasing spend in areas such as public relations, marketing, advertising and exploring mergers and acquisition opportunities.

They are also pursuing efficiencies through a combination of organisational, technology and process improvements, Mr Mogul said.

Deloitte Consulting India Private Ltd Chief Financial Officer (Region 10) Pashupati Kumar V said, ''in India, businesses are most concerned about capital costs which are constantly rising. Interest rates and inflation are a real concern. Additionally wage inflation has increased significantly and there is no indication of same cooling down.'' Of the companies surveyed in Asia and Australia, 35 per cent said they should have invested more in product and service development during the last economic downturn compared to 23 per cent globally.

Forty per cent said they should have invested more in market access compared to 34 per cent globally.

Rising energy costs outstrip other supply-side worries across the globe with 42 per cent of all respondents and 40 per cent from India, rest of Asia and Australia saying rising energy costs are an ''urgent concern''.

Fifty four per cent of companies from this region believe government policy and regulation presents the greatest threat to global expansion, 50 per cent cite currency exchange rates, 44 per cent cite access to financing and 31 per cent cite unfamiliar political systems/business customs.

On the demand side Indian, other Asian countries and Australian companies are far more concerned than their global counterparts about foreign exchange rates (44 per cent consider it an urgent concern compared to 30 per cent globally), interest rates (40 per cent compared to 30 per cent globally) and consumer price inflation (35 per cent compared to 25 per cent globally).


Please Wait while comments are loading...