Overall current business sentiment for the five ASEAN countries included in the survey improved 3.4 points over the previous month; the index, however, remained in negative territory for the ninth straight month in August. Individual indices improved for all countries over the previous month with the exception of Singapore. In Thailand, buoyant sentiment was noted among Japanese firms in the country's transport equipment sector, due to growing exports and recovering domestic demand. On the back of expanding global demand for semiconductors, strong business confidence among Japanese electric/electronics manufacturers in Malaysia and the Philippines helped push indices higher in these countries.
Overall forward business sentiment for the ASEAN region declined 0.7 points in this month's survey. The index for Indonesia (which had been on a downward trend since November 2005), improved a dramatic 24.4 points in August, due to an expected recovery in domestic demand for transport equipment and electric/electronics equipment.
Overall current business sentiment for China and North Asia declined 5.8 points over the previous month in August. By location, the index for Taiwan fell 14.8 points (and remained in negative territory for the fifth straight month), due to depressed sentiment among firms in the country's transport equipment, petroleum/chemical/steel and metals sectors. Although the index for North China slipped 22.4 points--owing to stagnant demand in foreign markets--overall current sentiment for mainland China remained buoyant (the index is now at 14.5). The index for Hong Kong (now at 14.6) continued strong, while the index for the Republic of Korea (ROK) leveled off in August to 6.7.
Overall forward business sentiment for China and North Asia declined 1.7 points in this month's survey. Indices for mainland China and Hong Kong remained strong, while those for ROK and Taiwan continued on a downward trend.
A total of 769 replies were received in ASEAN countries (124 in Indonesia, 107 in Malaysia, 204 in the Philippines, 223 in Singapore and 111 in Thailand), 220 in China (48 in the North, 59 in the Northeast, 72 in the East and 41 in the South); 137 in Hong Kong; 30 in the ROK and 106 in Taiwan.
JETRO, in cooperation with Japan's Ministry of Economy, Trade and Industry, has been conducting the survey in the first week of every month since June 2001 in the five major ASEAN countries, since June 2002 in South China, Hong Kong and Taiwan, since July 2002 in North and East China, and since October 2002 in the ROK and Northeast China. Results for the ROK are broken down into manufacturing and non-manufacturing only, but not by industry, and no breakdown is given for Northeast China, due to the small numbers of companies surveyed in these areas.
The aim of the survey is to provide up-to-date information on business conditions in the Asian economy to help companies develop more effective business strategies. Firms are asked to compare earnings prospects, supply and demand, inventory, sales prices and accounts receivable with the same period one year earlier. The current month and the following two to three months are evaluated separately in each question. Replies are limited to "better," "same" or "worse" than a year earlier. The diffusion index is the difference between the ratio of positive ("better") and negative ("worse") responses.
