Thesun 2009-01-05 Page23 Optimism Slumps To Record Low

theSun

23

| MONDAY JANUARY 5 2009

business

Optimism slumps to record low by Tim Leonard [email protected]

Going cashless pg 26

PETALING JAYA: Optimism among Medium to Large Enterprises (MLEs) around the world slumped by 56% in the last 12 months, and pushed the Grant Thornton International optimism/pessimism barometer to a record negative of -16% compared to +40% last year. It is the first time pessimists have outweighed optimists on their outlook for the economy since the research began in 2003. This year’s International Business Report, which surveyed senior executives from over 7,000 MLEs across 36 economies, showed an overwhelming consensus that falling consumer demand is the biggest threat to MLE businesses. There is also a stark difference in attitude towards the economic crisis between those in mature and emerging economies. SJ Grant Thornton Malaysia’s managing partner Datuk N.K. Jasani said Malaysian businesses’ optimism balance slumped deeply from +38% to +2%.

slumped from a balance of -49% last year to -85% this year. The pessimism drop is more pertinent due to the nature of the Japanese who tend to be very cautious. The United States scored its optimism at -34% while China was at +30%. The world’s four largest trading nations – the US, China, Japan and India had polarised scores. The US and Japan had their optimism levels in the negative while China and India had theirs in the positive quadrant. “These polarised results suggest there is still hope in the global marketplace and it is no coincidence that MLEs are the first to realise them,” said Jasani. “Their macro view of the world economic stage explains the overall slump in optimism but while MLEs are preparing for a prolonged and painful downturn, those in the emerging economies realise that at their

own micro level, there are real action to defend their businesses’ opportunities for resilient and cash flow in the short term but efficient MLEs,” he said. to hold their nerve and develop When asked to identify the a strategic plan for the long term single factor causing most con- – a new commercial environcern for their business, MLEs in ment will emerge but it could be 33 out of the 36 economies cited very different to the current one,” a fall in consumer demand with he added. a shortage of business credit The Grant Thornton Interthe second most worrisome national Business Report (IBR), concern. formerly known as the InternaJasani added that the econo- tional Business Owners Survey mies in the survey contribute to (IBOS), provides insight into the 81% of global GDP. views and expectations of chief “If politicians were in any executive officers, managing di“The slump in consumer doubt about the need to take rectors, chairmen or other senior demand is the greatest concern steps to boost consumer spend- executives over 7,200 Medium to for Malaysian business owners,” ing and kick start the global Large Enterprises (MLEs) across said Jasani. economy, this overwhelming 36 economies. “And shortage of consumer consensus from MLEs should The unique survey draws credit also holds threat to local surely persuade them.” upon 17 years of trend data for business owners,” he said. “MLEs can have huge advan- most European participants and In the survey, India came out tages over listed companies in seven years for many non-Eurotop as the most optimistic Asian times of commercial stress,” he pean economies. country with a score of +83%. explained. This is the fourth time the The second highest optimistic “Management can make deci- Malaysian firm is participating Asian country is the Philippines sions quickly because there are in the Global Report, now in its at +65% followed by Vietnam fewer stakeholders involved and seventh consecutive year. +31%. MLEs’ greater flexibility means Grant Thornton International Hong Kong suffered the bigchange can be will donate US$5 (RM18) to gest swing, which went from implemented Unicef for every completed IBR +81% optimistic last faster than questionnaire. year to -49%, in more buIn 2009, this will result in a factor of its reaucratic a donation of over US$36,000 exposure not mega enti- (RM129,600). The research was only as one of ties. conducted by Experian Business the hard hit fi“We’re Strategies Limited. nancial services hs nt mo e next 12 telling our To find out more about IBR centres but also essimism over th age of optimism/p -59% c l i e n t s and to obtain details of IBR its close trading Balance percent Hong Kong 2% to take reports and results please visit links with the Malaysia -50% 83% Taiwan -2% India s w i f t , www.internationalbusinessreWest. ia % ss Ru -63 % 65 Thailand -3% Philippines decisive port.com. The least opy an Germ -85% 31% Japan timistic business Vietnam -15% nd ala Ze w Ne 30% owners are the China (Global -16%) 15% Japanese. ornton re po ga Sin -34% Source: Grant Th United States for more info log on: Pessimism 11% 2009 IBR % stralia Au -47 om www.internationalbusinessreport.com levels in this United Kingd 3% da Cana year’s survey

International Grant Thornton ism barometer optimism/pessim