REUTERS - Business sentiment among Asia's top companies fell for the second straight quarter, dragged down by export-orientated economies such as China and Japan, while domestic spending helped boost Southeast Asia's outlook, a Thomson Reuters/INSEAD survey showed.
Concerns over global demand are hurting Asia's export engines, with autos, technology and shipping sectors among the least upbeat in the survey. Sectors more exposed to domestic growth were much more optimistic.
Carriers were less optimistic in the third quarter about their outlook. One of three respondents was positive and two were neutral, compared with three positive and two neutral in the previous three months. Global economic uncertainty was the key concern cited by those surveyed, with two airlines pointing to it as the main business risk, while the third cited fuel price volatility.
AUTOS: OPTIMISM FADES (INDEX AT 50 VS 67 IN Q2)
All three auto companies surveyed had a neutral view on their outlook, compared with three positive and six neutral in the previous quarter. One company cited foreign exchange volatility as the main business risk, while another cited global economic uncertainty.
BUILDING: TURNS PESSIMISTIC (INDEX AT 33 VS 60 IN Q2)
Sentiment in the building sector turned pessimistic. One of three companies surveyed responded negatively, while the other two had a neutral view. In the previous quarter, two of five companies surveyed were positive, two were neutral and one was negative.
One company cited global economic uncertainty as the biggest business risk. Australia's James Hardie Industries Ltd , which was one of the three companies surveyed, said it saw domestic uncertainty as the biggest risk.
FINANCIALS: LESS POSITIVE (INDEX AT 57 VS 67 IN Q2)
Banks and insurers were less positive on their outlook, with 10 of 14 surveyed holding a neutral view, three positive and one negative. In the previous survey, 12 of the 30 companies surveyed responded positively, while 16 were neutral and two were negative.
Employment levels declined for five of the respondents and stayed the same for eight and were higher for one. For most participants in the survey, which included Thailand's Siam Commercial Bank and Australia's Suncorp , global economic uncertainty was the dominant concern.
FOOD: LESS BULLISH (INDEX AT 73 VS 81 IN Q2)
Food and drinks companies were slightly less bullish about their outlook, with five of 11 surveyed responding positively and the rest neutral. In the previous survey, 10 of 16 companies polled were positive.
Companies in the Philippines and Indonesia were the most upbeat, with two companies from each country reporting a positive outlook. Four of the participants said rising costs were the biggest risk to their businesses, while three cited global economic uncertainty. Companies surveyed included Jollibee Foods and Thai Union Frozen Products .
DRUGS: SLIGHTLY LESS BULLISH (INDEX AT 80 VS 83 IN Q2)
Three of five companies surveyed responded positively, while the other two were neutral. Still, sentiment was slightly down from the previous quarter when four of six companies surveyed were positive. Two cited the global economy as the main concern, while one said the biggest risk was foreign exchange volatility. Companies responding included Japan's Daiichi Sankyo Co Ltd <4568.T> and India's Dr. Reddy's Laboratories .
PROPERTY: UPTICK IN SENTIMENT (INDEX AT 75 VS 55 in Q2)
Sentiment improved significantly with five of 10 surveyed responding with a positive view and the others with a neutral view. In the previous survey, seven of 10 firms had a neutral view. Developers in Singapore and the Philippines were the most bullish. Companies responding included Ayala and Ayala Land of the Philippines and Goodman Group of Australia .
RESOURCES: LESS UPBEAT (INDEX AT 63 VS 68 IN Q2)
Sentiment weakened among 19 resource firms surveyed, with eight reporting a positive outlook and eight a neutral one. This compares with 20 positive and 20 neutral out of 44 firms in the previous quarter.
More than half the participants cited the global economy as their main concern, while three cited rising costs. Companies responding included Coal India Ltd , Japan's Nippon Steel <5401.T> and Thailand's Banpu .
RETAIL: SENTIMENT WEAKENS (INDEX AT 50 VS 71 IN Q2)
Retail companies were less upbeat on their outlook, with four of the eight companies surveyed holding a neutral view, while two were positive and two were negative. This compares with seven positive responses out of 12 companies surveyed in the previous quarter.
Five companies were concerned about the global economy, and one said rising costs were its biggest worry. Japan's Fast Retailing <9983.T>, Aeon Group <8267.T>, Seven & I Holdings <3382.T> and China's Galaxy Entertainment <0027.HK> were among the companies that took part in the survey.
SHIPPING: MIXED ON OUTLOOK (INDEX AT 50 VS 56 IN Q2)
The responses from shipping companies were mixed, with one company holding a positive view, one neutral, and a third negative. In the previous survey, five of eight companies were neutral, two positive and one negative.
All three respondents, Hyundai Heavy Industries Co Ltd <009540.KS>, Hutchison Port Holdings Trust and Sembcorp Marine , were concerned about the global economy.
TECHNOLOGY: LESS UPBEAT (INDEX AT 58 VS 68 IN Q2)
Technology firms were less optimistic. Thirteen of 18 companies polled were neutral about their outlook, four were positive, and one was negative. In the last survey, 13 of 33 participants were positive and 19 were neutral.
All seven Japanese tech companies in the survey, including Softbank <9984.T> and Canon <7751.T>, were neutral, as were the two Indian and two Taiwanese tech companies that took part. The world's economic health was the main concern for most companies.
** Companies sampled for the survey may change from one quarter to the next.
(Compiled by Devidutta Tripathy and Anshuman Daga)