ASEAN Business Optimism Index

DUN & BRADSTREET
ASEAN
Business Optimism Index
Quarter 4 2015
Measuring
Confidence
Measured
Decisions
G R O W I N G R E L AT I O N S H I P S T H R O U G H D ATA
BUSI N E SS O P T I M I S M I N D E X
The Dun & Bradstreet Business Optimism Index (BOI) report is a measure of business confidence in the economy.
Released quarterly, it measures the pulse of the business community and is one of the most effective ways to track
how the business community perceives the business environment, and where they think it is going. Over time, this
quarterly survey has emerged as a leading indicator of turning points in economic activity in countries which it
is published.
SUR V E Y M ET H O D O L O G Y
For the purpose of conducting the survey, a sample is randomly selected from Dun & Bradstreet database, consisting of
companies belonging to the following sectors including Agriculture, Construction, Utilities, Finance, Manufacturing,
Mining, Services, Transportation, Wholesale, and Real Estate.
AGRICULTURE
CONSTRUCTION
UTILITIES
FINANCE
MANUFACTURING
MINING
SERVICES
TRANSPORTATION WHOLESALERS
REAL ESTATE
All the respondents in the survey are asked six standard questions regarding their expectations as to whether the
following critical parameters pertaining to their respective companies will register an increase ( ), decline ( ) or
show no change ( ) in the ensuing quarter as compared to the same quarter in the prior year: Volume of Sales, Net
Profits, Selling Prices, New Orders, Inventory Levels, and Employees.
SALES
VOLUME
NET
PROFIT
SELLING
PRICE
NEW
ORDERS
INVENTORY
EMPLOYMENT
The individual indices are then calculated by subtracting the percentage of respondents expecting decreases from
those expecting increases. Unless otherwise stated, increases and decreases in indices represent changes from the
previous quarter.
ASEAN Business Optimism Index
| Q U A R T ER 4 , 2015
The leading indicator of business confidence for Southeast Asia region
A S E AN -6
INDONESIA
MALAYSIA
PHILIPPINES
SINGAPORE
THAILAND
VIETNAM
S A L ES V OLU ME
N E T PR OFIT
S E L L I NG PR ICE
N E W OR DE R S
IN V E NTORY
E MPLOYME N T
Businesses are asked to give their
outlook on six key indicators
SALES
VOLUME
NET
PROFIT
NEW
ORDERS
SELLING
PRICE
GDP Forecast
2015
INVENTORY
2016
2017
EMPLOYMENT
2018
2019
10
9
8
7
6.8
6
6
5
4
6.1 6.2 6.2
6.1 5.9
6
4.8
4.7
5.8
6.2
5.8 5.7
5.8
5.2 5.2
3
2
2.5
2.9 3.1 3.1
3
3.5 3.7
4
5.4
6
6.2
4.2
2.5
1
0
INDONESIA
MALAYSIA
PHILIPPINES
SINGAPORE
THAILAND
VIETNAM
Source: Dun & Bradstreet – Country Insight Services
SUM M ARY
Among the 6 ASEAN member states surveyed by Dun & Bradstreet for its Business Optimism Index (BOI), overall
sentiment remains relatively upbeat in Vietnam and Philippines for the coming fourth quarter. In contrast, business
confidence has deteriorated sharply in Malaysia and Thailand. Most indicators have similarly underperformed in
Indonesia, the region’s largest economy, and Singapore. Prevailing global economic uncertainty continues to weigh
on expectations of the business community. The blunted growth trajectory of China, the third largest trading partner
for ASEAN, has also cast shadows on this region.
The quarterly ASEAN BOI is the first business optimism metric for Southeast Asia, one of the world’s largest trade
regions which will establish the ASEAN Economic Community (AEC) in December 2015.
INDEX
INDONESIA
Roaring Year Ends in a Whimper
05
MALAYSIA
Clouds Gathering in Malaysian Skies
08
PHILIPPINES
Slightly Shaken But Still Sturdy
11
SINGAPORE
Industries Brace for Some Hard Knocks
14
THAILAND
Not Quite Out of the Woods Yet
17
VIETNAM
Businesses Tread Cautiously After Rebound
20
Business Optimism Index
INDONESIA
Quarter 4 2015
Roaring Year Ends in a Whimper
6
40
5
30
5
20
4
2012
2013
Composite BOI
2014
GDP Growth (y-o-y %)
2015
Q4
Q3
Q2
Q1
Q4
Q3
Q2
Q1
3
Q4
4
0
Q3
10
(%)
6
GROWTH
50
GDP
7
Q2
The downward trend is in line with the degradation of
Indonesia growth projections, which until now has been
revised by the government, twice. At the beginning of
this year, the central bank forecasted growth to be in the
respectable range of 5.4% to 5.8%. Guidance at 5.0% to
5.4% in June, and then announced a lower one at 4.7% to
60
Q1
– Inventory and Employment also decreased, by -7% and
-4% respectively. Mining and Agriculture sectors will
likely downsize hiring.
OV ERA L L BOI S CORE CHA RT (Q3 2012 – Q4 2015 )
Q4
–New Orders posted the largest decrease q-o-q (-14%)
from 13.7% in Q3 to negative 0.3% in Q4. Exports failed
to lift prospects, as they have been falling rather sharply
due to low commodity prices and Chinese demand.
Q3
–Selling Price registered the highest value among all
parameters at 10%, albeit flat from last quarter. This
is as most respondents plan to increase prices in the
coming quarter, due to the weakening Rupiah against
US dollar.
To gear up the local economy President Joko Widodo
issued a package of booster policies named “September
1” to: (1) encourage national industrial competitiveness
through deregulation, debureaucratization, as well
as law enforcement; (2) accelerate national strategic
projects by eliminating various obstacles, blockages in the
implementation and completion of the strategic projects;
and (3) increase investment in property sector. In D&B’s
view, while government spending may still pick up in the
coming months, little additional support can be expected
form the monetary channel. As expected, the central bank
kept policy rates unchanged at its 18 August meeting.
While it would certainly like to loosen monetary policy if
it could, there is little scope for this on account of elevated
inflation and a fast depreciating currency. The authorities
will be keen to avoid a more precipitous decline in Rupiah
that could lead to a broader loss of investor confidence in
Indonesian assets.
SCORE
– Volume of Sales and Net Profit dropped 9% and 13%
q-o-q respectively. Wholesale is the most pessimistic
sector in both instances, followed by Transportation
and Mining.
5.1% in August. As global economic uncertainty prevails,
particularly with the looming US rate hike and weakening
Chinese currency, growth began to taper. Domestic
household consumption had also slipped from 5.01% in
Q1 to 4.97% in Q2.
B OI
The latest Business Optimism Index (BOI) from Dun
& Bradstreet Indonesia reported its fourth consecutive
quarter of decline. The index has experienced a marked
and continuous slide since the beginning of this year,
and indicates that the slowdown in domestic economy
is still taking place. The BOI score softened cautiously
from 34.9% in Q3 to 27.8 in Q4. All six parameters are
contractionary on q-o-q basis. The survey concludes that
a net weighted 11.9% of respondents see better business
performance during the quarter. Meanwhile, those with
pessimistic outlook stayed at 10.4%, the highest level in
the last five years.
Business Optimism Index
INDONESIA
Quarter 4 2015
V OLUM E OF SALES
2014 Q4
2015 Q1
2015 Q2
2015 Q3
2015 Q4
80
60
40
%
20
0
8.6
-20
Q-O-Q
-40
AGRICULTURE
MINING
CONSTRUCTION MANUFACTURING TRANSPORTATION
WHOLESALE
FINANCE
SERVICES
UTILITIES
ALL
N E T P ROFIT
80
60
40
%
20
0
12.6
-20
Q-O-Q
-40
AGRICULTURE
MINING
CONSTRUCTION
MANUFACTURING TRANSPORTATION
WHOLESALE
FINANCE
SERVICES
UTILITIES
ALL
SE LLING PRICE
80
60
40
%
20
0
1.0
-20
Q-O-Q
-40
AGRICULTURE
MINING
CONSTRUCTION MANUFACTURING TRANSPORTATION
WHOLESALE
FINANCE
SERVICES
UTILITIES
ALL
Business Optimism Index
INDONESIA
Quarter 4 2015
NE W O RDERS
2014 Q4
2015 Q1
2015 Q2
2015 Q3
2015 Q4
80
60
40
%
20
0
14.0
-20
Q-O-Q
-40
AGRICULTURE
MINING
CONSTRUCTION MANUFACTURING TRANSPORTATION
WHOLESALE
FINANCE
SERVICES
UTILITIES
ALL
IN V E NTORY
40
30
20
10
%
0
-10
7.3
-20
-30
Q-O-Q
-40
AGRICULTURE
MINING
CONSTRUCTION
MANUFACTURING TRANSPORTATION
WHOLESALE
FINANCE
SERVICES
UTILITIES
ALL
E M P LOYMENT
25
20
15
%
10
5
4.0
0
-5
Q-O-Q
-10
AGRICULTURE
MINING
CONSTRUCTION MANUFACTURING TRANSPORTATION
WHOLESALE
FINANCE
SERVICES
UTILITIES
ALL
Business Optimism Index
MALAYSIA
Quarter 4 2015
Clouds Gathering in Malaysian Skies
Business outlook of Malaysian firms plunged into the
contractionary zone for Q4 2015 following a strong
downward moderation in Q3. According to Dun &
Bradstreet Malaysia’s Business Optimism Index (BOI), the
score deteriorated from 2.62% in Q3 to negative 14.5%
in Q4. Compared to a year ago, this was 13.5% for Q4.
The sharpest drops were observed in Volume of Sales, Net
Profits and Inventory. Among the sectors, Construction
and Transportation held their ground and remain relatively
hopeful. Manufacturing fared the worst with all parameters
contracting, except Inventory which moved up a notch.
This is the 11th quarterly BOI released in Malaysia.
–Employment levels have fallen for the fourth
consecutive quarter from 6.5% in Q3 to negative
4.5% in Q4.
– Volume of Sales took an acute fall, from 8% in Q3 to
negative 34% in Q4. Net Profit also dived from 2%
in Q3 to negative 37% in Q4. Although all the sectors
surveyed had expected Q4 to worsen at varying degrees,
Agriculture is the hardest hit in both parameters.
Despite gathering clouds in the quarter ahead, D&B’s
view is that Malaysia’s problems are, to some extent,
superficial, and that the country needs merely to step
back from further debt accumulation. The central bank
has stepped back from intervening to stabilise the
currency, which we regard as a positive development.
Economic reforms undertaken in the past decades have
been sound and the fundamentals are far better than in
other economies in the region.
30
20
10
0
-10
2013
2014
2015
Q4
Q3
Q2
Q1
Q4
Q3
Q2
Q1
Q4
Q3
-20
Q2
– Inventory recovered by +2% from last quarter. The only
expansionary sector here is Construction (mild increase of
+5%), while the rest are either holding their stock levels
(Agriculture, Financial, Mining) or rationalizing them.
40
SCORE
–New Orders contracted following two consecutive
quarters of growth (-16% q-o-q). Manufacturing is
the only sector that furnishes expectations on new
orders. It should be noted that the Nikkei Malaysia
Manufacturing Purchasing Managers’ Index (PMI)
had fallen to a near 3-year low to 47.2 in August 2015.
OV ERA L L BOI S CORE CHA RT (Q2 2013 – Q4 2015 )
B OI
– Selling Price climbed from 6% in Q3 to 11% in Q4;
bearing in mind that the new goods and services tax
(GST) had taken effect at the start of Q2. This is
also the only indicator which experienced a y-o-y
increase, from 1.5% in Q4 2014 to 11% this year.
Political unrest, currency volatility (the ringgit has
fallen to its lowest since the Asian crisis), and low
energy prices (the government relies on oil and gas for
almost a third of its revenue) will continue to take a
toll on confidence. Foreign investors are selling both
government debt and shares (the country’s stock market
has also fallen sharply), and the cost of insuring against
a Malaysian debt default has soared.
Business Optimism Index
MALAYSIA
Quarter 4 2015
V OLUM E OF SALES
2014 Q4
2015 Q1
2015 Q2
2015 Q3
2015 Q4
60
50
40
30
20
%
10
0
-10
42.0
-20
-30
Q-O-Q
-40
AGRICULTURE
CONSTRUCTION
FINANCE
MANUFACTURING
MINING
SERVICES
TRANSPORTATION
WHOLESALE
ALL
NE T PROF IT
80
60
40
20
0
%
-20
-40
-60
39.0
-80
-100
Q-O-Q
-120
AGRICULTURE
CONSTRUCTION
FINANCE
MANUFACTURING
MINING
SERVICES
TRANSPORTATION
WHOLESALE
ALL
SE LLING PRICE
80
60
40
%
20
0
4.5
-20
Q-O-Q
-40
AGRICULTURE
CONSTRUCTION
FINANCE
MANUFACTURING
MINING
SERVICES
TRANSPORTATION
WHOLESALE
ALL
Business Optimism Index
MALAYSIA
Quarter 4 2015
NE W O RDERS
2014 Q4
2015 Q1
2015 Q2
2015 Q3
2015 Q4
15
10
5
%
0
-5
17.3
-10
Q-O-Q
-15
MINING
INV E N TORY
20
15
10
5
0
%
-5
-10
-15
2.0
-20
-25
Q-O-Q
-30
AGRICULTURE
CONSTRUCTION
FINANCE
MANUFACTURING
MINING
SERVICES
TRANSPORTATION
WHOLESALE
ALL
E M P LOYMENT
40
30
20
%
10
0
-10
11.0
-20
Q-O-Q
-30
AGRICULTURE
CONSTRUCTION
FINANCE
MANUFACTURING
MINING
SERVICES
TRANSPORTATION
WHOLESALE
ALL
Business Optimism Index
PHILIPPINES
Quarter 4 2015
Slightly Shaken But Still Sturdy
60
40
20
2015
Q4
0
Q3
–
New Orders and Inventory both moderated
downwards (61% and 30% respectively). Wholesale,
Agriculture and Mining sectors are the most
affected. It should be noted that exports have been
underperforming for most of the year.
80
Q2
–Selling Price declined from 22% in Q3 to 15% in
Q4. Consumer prices have remained soft (it grew just
0.8% y-o-y in July, the lowest inflation on record),
but authorities warned that the El Nino phenomenon
may push inflation higher in coming quarters.
OV ERA L L BOI S CORE CHA RT (Q1 2015 – Q4 2015 )
Q1
– Net Profit in Q4 trails slightly behind compared to
Q3 (73% and 77% respectively). More businesses
in Finance and Transportation expect bottomlines
to widen in Q4, a pattern similarly observed in
Volume of Sales. Although the optimism level for
most industries stays positive, the overall parameter
is dragged down by Mining.
Business confidence ahead may be somewhat shaken
but remains sturdy. While the Asian financial market
turmoil has affected the Philippines, according to most
analyses the country is among the least vulnerable to
China in Southeast Asia (and to other recent adverse
developments such as soft commodity prices). The
Philippine peso has declined less than other Asian
currencies (similarly, the stock market has been more
resilient), its FX reserves have held steady, and the local
financial markets are less internationalised. Philippine
companies are also known to have learned their lesson
from the Asian crises and to fully hedge exchange
rate risk. It is our view as well that the fallout for the
Philippines will only be increased volatility; the main
downside risk for the country is indirect, via trade
links (in the event that a Chinese slowdown dampens
global growth).
SCORE
– Volume of Sales increased +5.7%, buoyed by strong
domestic demand throughout the year. In fact,
growth is expected in Q4 in nearly all industries.
D&B maintains its GDP forecast of 6.2% for the
year 2015, the region’s fastest.
–Employment retreated from 45% in Q3 to 37% in
Q4. This is a natural adjustment after the almost
threefold jump from Q2 to Q3, and with growing
economic uncertainties abroad.
B OI
The overall confidence of the Filipino business community
eased from 57% in Q3 to 52% in Q4, according to the
latest findings by Dun & Bradstreet (D&B) Philippines.
The market has moved into its fourth consecutive quarter
of decline, having started the year with heady optimism but
gradually decelerated. Out of the six survey parameters,
only Volume of Sales is expansionary, inching from 75%
in Q3 to 81% in Q4. Transportation and Finance are
the most optimistic sectors. Conversely, Mining finds the
least to cheer with depressed global energy prices.
Business Optimism Index
PHILIPPINES
Quarter 4 2015
V OLUM E OF SALES
2015 Q1
2015 Q2
2015 Q3
2015 Q4
120
100
80
%
60
40
5.7
20
Q-O-Q
0
AGRICULTURE
CONSTRUCTION
FINANCE
MANUFACTURING
MINING
SERVICES
TRANSPORTATION
WHOLESALE
ALL
NE T PROF IT
120
100
80
%
60
40
4.4
20
Q-O-Q
0
AGRICULTURE
CONSTRUCTION
FINANCE
MANUFACTURING
MINING
SERVICES
TRANSPORTATION
WHOLESALE
ALL
SE LLING PRICE
80
60
40
20
%
0
-20
7.3
-40
-60
Q-O-Q
-80
AGRICULTURE
CONSTRUCTION
FINANCE
MANUFACTURING
MINING
SERVICES
TRANSPORTATION
WHOLESALE
ALL
Business Optimism Index
PHILIPPINES
Quarter 4 2015
NE W O RDERS
2015 Q1
2015 Q2
2015 Q3
2015 Q4
120
100
80
%
60
40
13.3
20
Q-O-Q
0
AGRICULTURE
CONSTRUCTION
FINANCE
MANUFACTURING
MINING
SERVICES
TRANSPORTATION
WHOLESALE
ALL
IN V E NTORY
120
100
80
60
%
40
20
4.9
0
-20
Q-O-Q
-40
AGRICULTURE
CONSTRUCTION
FINANCE
MANUFACTURING
MINING
SERVICES
TRANSPORTATION
WHOLESALE
ALL
E M P LOYMENT
100
80
60
40
20
%
0
-20
-40
7.6
-60
-80
-100
Q-O-Q
-120
AGRICULTURE
CONSTRUCTION
FINANCE
MANUFACTURING
MINING
SERVICES
TRANSPORTATION
WHOLESALE
ALL
Business Optimism Index
SINGAPORE
Quarter 4 2015
Industries Brace for
Some Hard Knocks
Following two consecutive quarters of increase since Q2,
business optimism plunges to near contractionary levels
in the final quarter of 2015. According to the Singapore
Commercial Credit Bureau (SCCB), which operates
under Dun & Bradstreet Singapore, the overall optimism
index nosedived from 15% in Q3 to 0.1% in Q4, barely
scratching negative territory. In y-o-y comparison, the
index has declined by 10.79%. The latest BOI reading is
the second lowest in nearly 3 years when it hit a historical
low of -0.82% in Q1 2013. For this quarter Q4, only
2 out of the six parameters surveyed are expansionary,
which stands in sharp contrast last quarter when all six
were expansionary.
Both Manufacturing and Transportation sectors have
taken a severe beating. The outlook for Manufacturing has
been particularly bleak for the most part of 2015, weighed
down by biomedical and transport engineering subsectors. According to the Ministry of Trade and Industry,
the Manufacturing sector had shrunk by 4.9% y-o-y.
–Both Volume of Sales and Net Profit sank into the
contractionary zone for the first time since Q1 2015.
Sales tumbled from 28% in Q3 to negative 4% in Q4.
Moving in the similar direction, Profits fell from 14%
in Q3 to negative 0.7% in Q4.
– Meanwhile, Inventory decreased sharply but managed
to stay above water, from 13% in Q3 to 1% in Q4.
Manufacturing is hit hardest at negative 60%.
–Interestingly, Employment only moderated slightly
from 16% in Q3 to 15% in Q4. Hiring sentiments
stood firm amid a robust talent market in the city
state. Gains are strongest in Construction, in line
with the pick-up of public sector projects. When
viewed y-o-y, Employment actually increased +4.3%
in the corresponding quarter.
The compound effects of an overall global and regional
economic slowdown as well as mounting credit risks
emanating from parts of Asia-Pacific such as China
have dampened business sentiments significantly for
the final quarter. The report anticipates a challenging
quarter ahead for businesses as there has been a general
decline in optimism levels across most sectors, even in
Construction and Services which are typically energetic.
As sign of things to come, the Monetary Authority of
Singapore recently trimmed its GDP forecast from
2.7% in June to 2.2% in September this year.
OV ERA L L BOI S CORE CHA RT (Q1 2013 – Q4 2015 )
50
20
10
0
2013
2014
2015
Q4
Q3
Q2
Q1
Q4
Q3
Q2
Q1
Q4
Q3
-10
Q2
SCORE
30
Q1
–New Orders relapsed to negative 22% in Q4, after
briefly reversing the downtrend in Q3. This concurs
with the Purchasing Manager’s Index (PMI), which fell
for the second consecutive month in August, following
further contractions in new orders and production
output domestically, and new export orders overseas.
40
B OI
–Selling Price has also fallen into the subzero region,
from 2% in Q3 to negative 6% in Q4. The decline is
even steeper on a y-o-y basis.
Business Optimism Index
SINGAPORE
Quarter 4 2015
V OLUM E OF SALES
2014 Q4
2015 Q1
2015 Q2
2015 Q3
2015 Q4
60
50
40
30
20
%
10
0
-10
32.1
-20
-30
Q-O-Q
-40
AGRICULTURE
CONSTRUCTION
FINANCE
MANUFACTURING
MINING
SERVICES
TRANSPORTATION
WHOLESALE
ALL
NE T PROF IT
80
60
40
20
%
0
-20
15.0
-40
-60
Q-O-Q
-80
AGRICULTURE
CONSTRUCTION
FINANCE
MANUFACTURING
MINING
SERVICES
TRANSPORTATION
WHOLESALE
ALL
SE LLING PRICE
100
80
60
40
20
%
0
20
-40
8.5
-60
-80
Q-O-Q
-100
AGRICULTURE
CONSTRUCTION
FINANCE
MANUFACTURING
MINING
SERVICES
TRANSPORTATION
WHOLESALE
ALL
Business Optimism Index
SINGAPORE
Quarter 4 2015
NE W O RDERS
2014 Q4
2015 Q1
2015 Q2
2015 Q3
2015 Q4
20
15
10
5
%
0
-5
-10
11.4
-15
-20
Q-O-Q
-25
MINING
INV E N TORY
80
60
40
%
20
0
37.6
-20
Q-O-Q
-40
AGRICULTURE
CONSTRUCTION
FINANCE
MANUFACTURING
MINING
SERVICES
TRANSPORTATION
WHOLESALE
ALL
E M P LOYMENT
70
60
50
40
30
%
20
10
0
0.7
-10
-20
Q-O-Q
-30
AGRICULTURE
CONSTRUCTION
FINANCE
MANUFACTURING
MINING
SERVICES
TRANSPORTATION
WHOLESALE
ALL
Business Optimism Index
THAILAND
Quarter 4 2015
Not Quite Out of the Woods Yet
40
30
20
10
0
2014 2013
2014
2015
2015
Q4
Q3
Q4
Q2
Q3
Q1
Q4
Q3
Q2
Q2
Q1
-10
Q4
Q1
After martial law was lifted in Q2 (from 10 months of coup)
and with continued political stability, business expectations
would have emerged out of the woods in Q4. Alas it may
have slipped deeper into it. The bomb attack on 17 August
at the Erawan shrine in central Bangkok was unfortunate
50
Q3
–Employment contracted by 8% q-o-q. Most of the
downsizing is expected to happen in Agriculture and
Real Estate. Note: Agriculture accounts for 10% of
GDP and employs more than 40% of the country’s
population.
OV ERA L L BOI S CORE CHA RT (Q4
(Q1 2014
2013 – Q4 2015 )
Q4
Q2
– Expectations for New Orders are down by 13%, while
Inventory levels will pile up by 8%. For the former,
sharpest drops are seen in Agriculture, Utilities and
Manufacturing. Rice output is already hampered by
months of drought, and export momentum has slowed.
Q1
–Selling Price adjusted slightly downwards by 5%,
mainly for Services. Other sectors like Transportation,
Finance and Mining plan to raise prices.
The negative impact of the attack is already apparent
with the tourism ministry on 26 August reporting a
17% decline in average daily tourist inflows to 70,000
in the days following the attack. Nonetheless in D&B’s
view, tourist inflows should recover if, as seems likely
at present, the bomb attack is not part of a sustained
campaign. Taking account of growing evidence of
economic downturn in its key trade partner China
(arguably best evidenced by the country’s recent currency
devaluation initiative), we are thus further trimming our
2015 real GDP forecast to 2.5% from 2.7% previously.
SCORE
–Volume of Sales and Net Profit dropped 14% and
11% q-o-q respectively. The outlook is clearly
affected by the recent bomb attack (more below).
Consumer confidence had already been falling for
six straight months before this occurred, according
to the ANZ-Roy Morgan Index.
just as recovery signs were increasing. Thailand’s already
fragile economic performance will clearly not be helped by
such a large-scale, international headline-making incident
at a prime tourist site in its capital city. According to official
data, real GDP growth had already slowed to 2.8% y-o-y
in Q2 from 3.0% in Q1. With exports declining and private
consumption weighed down by a high debt burden and
weather conditions hurting farmer incomes, the recovering
tourism was sector was among the few clear bright spots
for the country’s economic outlook.
B OI
The overall Business Optimism Index (BOI) by Dun &
Bradstreet Thailand contracted by 8% q-o-q, as survey
respondents expect dimmer prospects in Q4. The BOI score
sits at negative 5%, the second weakest in ASEAN after
Malaysia. On closer reading, most parameters are anemic
with Volume of Sales and Net Profit slipping in subzero
region (both at -12%) for the first time in recent years.
Business Optimism Index
THAILAND
Quarter 4 2015
V OLUM E OF SALES
2014 Q4
2015 Q1
2015 Q2
2015 Q3
2015 Q4
120
100
80
60
%
40
20
0
14.0
-20
-40
Q-O-Q
-60
AGRICULTURE
MINING
MANUFACTURING
UTILITIES
CONSTRUCTION
WHOLESALE
SERVICES
TRANSPORTATION
FINANCE
REAL ESTATE
ALL
NE T PROF IT
120
100
80
60
%
40
20
0
11.0
-20
-40
Q-O-Q
-60
AGRICULTURE
MINING
MANUFACTURING
UTILITIES
CONSTRUCTION
WHOLESALE
SERVICES
TRANSPORTATION
FINANCE
REAL ESTATE
ALL
SE LLING PRICE
100
80
60
%
40
20
13.0
0
Q-O-Q
-20
AGRICULTURE
MINING
MANUFACTURING
UTILITIES
CONSTRUCTION
WHOLESALE
SERVICES
TRANSPORTATION
FINANCE
REAL ESTATE
ALL
Business Optimism Index
THAILAND
Quarter 4 2015
NE W O RDERS
2014 Q4
2015 Q1
2015 Q2
2015 Q3
2015 Q4
100
80
60
40
%
20
0
-20
13.0
-40
-60
Q-O-Q
-80
AGRICULTURE
MINING
MANUFACTURING
UTILITIES
CONSTRUCTION
WHOLESALE
SERVICES
TRANSPORTATION
FINANCE
REAL ESTATE
ALL
IN V E NTORY
40
30
20
10
0
%
-10
-20
-30
8.0
-40
-50
Q-O-Q
-60
AGRICULTURE
MINING
MANUFACTURING
UTILITIES
CONSTRUCTION
WHOLESALE
SERVICES
TRANSPORTATION
FINANCE
REAL ESTATE
ALL
E M PLOYMENT
120
100
80
60
%
40
20
0
8.0
-20
-40
Q-O-Q
-60
AGRICULTURE
MINING
MANUFACTURING
UTILITIES
CONSTRUCTION
WHOLESALE
SERVICES
TRANSPORTATION
FINANCE
REAL ESTATE
ALL
Business Optimism Index
VIETNAM
Quarter 4 2015
Businesses Tread Cautiously
After Rebound
6
5.5
30
5
4.5
20
4
10
3.5
3
2014
Composite BOI
2015
GDP Growth (y-o-y %)
Q4
Q3
Q2
Q4
Q1
Q3
0
GROWTH
6.5
40
GDP
7
50
(%)
7.5
60
Q2
–On y-o-y basis, New Orders experience the largest
increase (14%) while Selling Price and Inventory
Level suffer the largest drops (-23% and -20%
respectively).
OV ERA L L BOI S CORE CHA RT (Q4 2013 – Q4 2015 )
Q1
–With current inflation prevailing at low levels
and amid the CPI drop in August (m-o-m), it is
understandably obvious that Selling Price shrank
from 13% in previous quarter to 3% this quarter.
We expect that current optimism will continue to have legs
right through the coming quarter with minor lifts, given
recent positive signals from the local macroeconomic
environment and the cyclical upturn from the annual Tet
season in Q1 2016; while being mindful of the possibility
of unfavorable exchange rate pressures. Businesses will
remain cautiously expansionary.
Q4
– Volumes of Sales and Net Profit are two parameters with
the highest scores (71% and 88% respectively). While
Volumes of Sales stayed flat from previous quarter, Net
Profit showed a large jump to 88% (+13%). This is the
highest level observed for this parameter since Q4 2013.
The buoyancy of Net Profit given stable Sales is led by
the Services, Transportation, and Wholesale sectors,
perhaps due to the recent downward trend of fuel prices.
– More tellingly, Employment ceded slightly (-2% q-o-q
and -5% y-o-y) despite rosy topline growth in Volume
of Sales and Net Profit. This suggests that businesses
are still cautious about their expansion plans. It is
worth noting that on y-o-y basis, the growth in Sales
and Profit is relatively modest (in single digits, +4%
and +9% respectively), which might not adequately
justify business owners to increase their payroll in
next year’s budget plans.
SCORE
At the outset, it appears surprising that Manufacturing
slumped -11% down to 37% this quarter despite the
Industrial Production Index of 8M-2015 reporting
10.4% annual growth, a clear improvement from 8.1%
of 8M-2014. This is probably due to the impact of recent
adjustments in exchange rates, which has hit both importsubstitution and export-orientation firms. Nonetheless,
it should be noted that optimism in Manufacturing is
still riding at record high levels, since Q4 2013.
–Inventory Level increased sharply from 4% in
previous quarter to 20% this quarter, particularly for
the Wholesale (+34%) and Mining (+27%) sectors.
While there is anticipation and preparation for
higher demand in Q4, the growth also appears to be
corrective due to a precipitous drop in Q3.
B OI
According to Dun & Bradstreet (D&B) Vietnam,
businesses have maintained their optimistic streak from
the previous quarter, with a few minor upshoots. After
hitting a trough of 24% in Q1 2015, the overall index
regained momentum in later quarters and now reached
45% for Q4 2015 (+2% q-o-q), nearly as high as Q4
2014 (47%). The largest increases are seen in Wholesale
(+12%) and Services (+9%). Construction and Finance
still lead with the highest optimism levels (54% and
50% respectively) but almost without any change.
Business Optimism Index
VIETNAM
Quarter 4 2015
V OLUM E OF SALES
2014 Q4
2015 Q1
2015 Q2
2015 Q3
2015 Q4
100
90
80
70
60
%
50
40
30
1.0
20
10
Q-O-Q
0
CONSTRUCTION
FINANCE
MANUFACTURING
MINING
SERVICES
TRANSPORTATION
WHOLESALE
ALL
NE T PROF IT
100
90
80
70
60
%
50
40
30
13.0
20
10
Q-O-Q
0
CONSTRUCTION
FINANCE
MANUFACTURING
MINING
SERVICES
TRANSPORTATION
WHOLESALE
ALL
SE LLING PRICE
90
80
70
60
50
%
40
30
20
10.0
10
0
-10
Q-O-Q
-20
CONSTRUCTION
FINANCE
MANUFACTURING
MINING
SERVICES
TRANSPORTATION
WHOLESALE
ALL
Business Optimism Index
VIETNAM
Quarter 4 2015
NE W O RDERS
2014 Q4
2015 Q1
2015 Q2
2015 Q3
2015 Q4
90
80
70
60
%
50
40
30
16.0
20
10
Q-O-Q
0
CONSTRUCTION
FINANCE
MANUFACTURING
MINING
SERVICES
TRANSPORTATION
WHOLESALE
ALL
INV E N TORY
80
70
60
50
%
40
30
20
5.0
10
0
Q-O-Q
-10
MANUFACTURING
MINING
WHOLESALE
ALL
E M P LOYMENT
50
45
40
35
30
%
25
20
15
2.0
10
5
Q-O-Q
0
CONSTRUCTION
FINANCE
MANUFACTURING
MINING
SERVICES
TRANSPORTATION
WHOLESALE
ALL
ABO UT D UN & B R A D S T R E E T ® ( D&B )
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© Dun & Bradstreet, Inc. 2015. All rights reserved.
D & B B U SI N E S S O P T I M I S M I N DEX ( B O I )
IND ON ESIA Analysis and commentary by Bayu Krisna Setyadi, Dun & Bradstreet Indonesia.
For more information, please visit www.dnb.co.id, or contact our Customer Service Center at
+62 21 5790 0979, or email us [email protected].
MALAY SIA Analysis by Dun & Bradstreet Malaysia. Commentary by Dr Lau Wee Yeap, Senior Lecturer,
Faculty of Economics and Administration, University of Malaya, Malaysia.
For more information, please visit www.dnb.com.sg, or contact Eugene Zachariah Tan at
+65 6439 6670, or email [email protected].
P HILIPP IN ES Analysis and commentary by Ian Velasco, Dun & Bradstreet Philippines.
For more information, please visit www.dnb.com.ph, or contact our Customer Service Center at
+632 907 6080, or email us [email protected].
SINGA P ORE Analysis by Singapore Commercial Credit Bureau. Commentary by Dr Chan Siew Pang, Honorary
Senior Lecturer, La Trobe University, Australia, a formal Faculty Member of the National
University of Singapore Business School and Director of Arete Analytics Pte Ltd.
Established in 2005, Singapore Commercial Credit Bureau (SCCB) operates a database of
local enterprises and their credit history to provide clients with the insight needed to build
trust and improve the quality of business relationships with their customers, suppliers and
business partners. SCCB operates under Dun & Bradstreet Singapore. For more information,
please visit www.dnb.com.sg, or contact Eugene Zachariah Tan at +65 6439 6670, or email
[email protected].
T HAIL AN D Analysis by Dun & Bradstreet Thailand. Commentary by Asst. Prof. Pannarai Sangvichien, Dr.
Chareunsak Sangchatsuwan, Mr. Somnuk Assadornviseth, Ms Sariya Nuchanong, Ms. Banjertsak
SanhaPuckdee, Huachiew Chalermprakiet University.
For more information, please visit www.dnb.co.th, or contact our Customer Service Center at
+662 657 3999 ext. 4200, or email us [email protected].
V I E TNAM Analysis by Dun & Bradstreet Vietnam. Commentary by Assoc. Prof. Dr. Nguyen Minh Ha, Dean
of Post Graduate School, HCMC Open University, Vietnam.
For more information, please visit www.dnbvietnam.com, or contact our Customer Service Center
at +848 3911 7288, or email [email protected].