Asia Business Barometer
Q1/2012

Business executives' outlook on Asia for the next 12 months improved again in our latest survey conducted in January 2012. The overall sentiment reflects optimism about higher revenue growth.

1. Areas for Optimism
   
   • Continued Optimism About Top-Line Growth: Seventy-eight percent of respondents expect their revenue in Asia to be higher in the next 12 months (up from 70% in Q4 2011). Furthermore, 75% of respondents expect their industry to experience higher growth in Asia (up from 65% in Q4 2011).
     
   • Slightly Abating Commodity Cost Pressure: Concerns over commodity cost pressure abated slightly, as fewer executives anticipate higher costs on energy or major non-energy commodities compared to previous quarters. That said, more executives are concerned with escalating labor and core input costs compared to previous quarters.
     
2. Areas for Vigilance
   
   • Moderating Macroeconomic Growth: Less than one-half of executives expect higher growth in China or other Asian economies in the next 12 months, compared to 68% and 67%, respectively, in Q1 2011. Furthermore, the percentage of respondents expecting higher consumer spending declined from 67% in Q1 2011 to 40% today.
     
   • Inflationary Pressure: While inflationary pressure remains a major concern, the percentage of respondents expecting higher inflation in the next 12 months declined from 79% in Q4 2011 to 63% in Q1 2012.