Surprise credit crunch knocks business confidence in the Asia Pacific

Almost half of respondents reported confidence losses.

The third quarter was a challenging time for businesses in the Asia-Pacific region, according to a survey of finance professionals released by the Association of Chartered Certified Accountants and the Institute of Management Accountants.

The survey found that overall, the region suffered a significant loss of confidence after nine months of relative buoyancy, with only 15% of respondents reporting confidence gains down from 24% in the second quarter. The number of respondents who reported confidence losses climbed to 48% from just 37% in Q2.

The report stated that tightening conditions are, to some extent, to blame for the recent poor confidence readings.

“The Government’s foreign workers policy has reduced the population of foreign workers and affected demand for our consumer products, while high commodities prices forced our overseas buyers to reduce purchases,” said one SME director based in Singapore.

Although business opportunities held up reasonably well and access to finance tightened only marginally, respondents in the region reported a severe tightening of business cashflow; investment opportunities were also down significantly quarter-on-quarter, continuing a persistent medium-term trend.