Thai business optimism slumps further: report

Peter Walker, partner of Grant Thornton's business consulting in Thailand, said the barometer of Thailand's business leaders' optimism in 2008 and at the beginning of this year had fallen from +30 per cent in 2007. The survey was conducted just after the airport closures, when the nationwide economic mood was at an all-time low.

"This fall is not surprising given the double-whammy of the global economic woes and local political instability," he said.

Grant Thornton's International Business Report 2009 surveyed senior executives from more than 7,000 businesses across 36 countries.

Optimism among global businesses has slumped by 56 per cent in the last 12 months and pushed the Grant Thornton International optimism/pessimism barometer to a record negative balance of -16 per cent, compared with +40 per cent in the same period last year.

This is the first time pessimists have outweighed optimists about the outlook for their economy since the research began in 2003. The survey also shows an overwhelming consensus that falling consumer demand is the biggest threat to businesses.

There are also some startling differences in attitude towards the economic crisis between mature and emerging economies.

Of the four largest trading nations, businesses in the United States scored at -34 per cent, while mainland China recorded +30 per cent. The two countries together contribute more than 32 per cent of global gross domestic product.

Similarly, Japan and India - which contribute over 11 per cent of global GDP - scored at -85 per cent and +83 per cent, respectively.

"While all businesses are preparing for a prolonged and painful downturn, those in the emerging economies realise that it could offer real opportunities," Walker said.

Eleven countries remained optimistic about their economic outlook, including India (+83 per cent), Botswana (+81 per cent) and Brazil (+50 per cent). Meanwhile, Japan and Spain were the most pessimistic, with scores of -85 per cent and -65 per cent, respectively.

The biggest swing in sentiment was in Hong Kong, which went from +81 per cent last year to -49 per cent. A key factor is its exposure not only as one of the hardest-hit financial services centres but also of its close trading links with both the East and the West.

According to the survey, businesses in 33 out of the 36 countries cited a fall in consumer demand as the single factor causing most concern for their businesses, followed by a shortage of business credit.

In Thailand, falling consumer demand far outweighed all other business leaders' concerns, said Walker.