A Japan External Trade Organisation (Jetro) survey of Japanese companies and affiliates operating in 12 East Asian countries revealed that overall current business sentiment remained subdued in Asean in September for the 10th straight month.

Overall business sentiment for the five Asean countries included in the survey declined 5.7 points over last month, with the index remaining in negative territory for the 10th straight month. Individual indexes remained negative  for all countries except Singapore.

Overall forward business sentiment in Asean improved 1.4 points, although the index remained in negative territory. Notable gains in this month's survey were recorded in the Philippines, where the index returned to positive territory, and Indonesia, which recorded a dramatic 15.6 points (although remaining negative) on the back of a buoyant transport-equipment industry.

Jetro included a question about the negative impact (if any) of rising labour costs on business sentiment for this and the next two or three months.

Overall, 37.9 per cent of respondents linked rising labour costs to falling current sentiment, while 46.4 per cent expected a negative impact over the next two or three months.

A higher percentage of firms in China and North Asia (compared with  Asean) cited a negative impact from rising labour costs. Respondents linking labour cost rises with falling sentiment amounted to 38.7 per cent in China and North Asia and 37.4 per cent in Asean. Firms expecting a negative impact over the next two or three months amounted to 49.2 per cent in China and North Asia and 44.5 per cent in Asean.