SENTIMENT at some of Asia's biggest firms deteriorated again in the fourth quarter, falling to a four-year low under the weight of concerns about slowing growth in China, the region's biggest economy, a Thomson Reuters/Insead survey showed.
The Thomson Reuters/Insead Asian Business Sentiment Index , representing the six-month outlook at 103 firms, was 58 in the December quarter from 60 in September and 72 a year prior. A reading over 50 indicates a positive view.
The impact of change in China's economy is particularly acute for the region's smaller and less diverse countries.
In Singapore, which counts China as its top trading partner, the business sentiment index was at 21, the lowest among the 11 economies in the poll. The reading for Australia, a major supplier of resources to China, was also the lowest in three years.
China's economy - growing at its slowest pace in six years - ranked as the chief risk to corporate forecasts for the second consecutive quarter, with volatile financial markets also of concern, showed the survey whose respondents included SoftBank Group, Kia Motors, Tata Steel and Olam International.
"A very strong revision to the expected growth rate of China (in recent months) is having a bigger effect on all these numbers, across all countries, across all sectors," said Antonio Fatas, economics professor at Insead in Singapore.
"If you think of growth in Asia, Asia will do well, Asia will grow faster than most of the regions of the world, but it will grow at a rate very different from the previous 10 years."
At the start of the December quarter, analysts estimated China's growth next year at 6.5 per cent versus 6.7 per cent estimated three months prior.
After polling closed for the Thomson Reuters/Insead survey over the weekend, China reported that last month's data beat market estimates including factory output, retail sales and investment.
The showing indicated that stimulus measures might be steadying the economy, analysts said, though falling property prices and high domestic debt featured among challenges.
Thomson Reuters and global business school Insead conducted the poll from Nov 30 to Sunday. Companies surveyed change from quarter to quarter.
Of 103 respondents, 21 per cent were negative - the most in over six years - while 42 per cent were neutral and 37 per cent positive.
Philippine companies emerged as the most optimistic for a second consecutive quarter with a reading of 77, followed closely by those in South Korea, while firms in Taiwan were only a little less pessimistic than those in Singapore.
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