Asian firms’ confidence at three year-high

SHANGHAI: Business confidence in Asia rose to a three-year-high in the second quarter of the year, propelled by a slew of favourable economic data across the region and easing concerns over the health of China´s economy, a Thomson Reuters/INSEAD survey showed.

The Thomson Reuters/INSEAD Asian Business Sentiment Index , representing the six-month outlook of 101 firms, climbed to 74 in April-June from 70 three months earlier.  A reading over 50 indicates a positive view.

"The world economy is starting to look more solid," said Singapore-based economics professor Antonio Fatas at global business school INSEAD. "The U.S. is reaching good levels of GDP and employment, with Europe finally recovering and Asia seeing less risks ahead.

China looks like it´s in a more stable situation after having ups and downs because of capital outflows over the last couple of years and also the risks of a debt crisis. "China is widely expected to meet its 6.5 percent economic growth target this year without too many bumps, helped by a pick-up in exports and stable growth in factory output and retail sales. The government has also sought to reduce debt.

Reflecting the upbeat picture, the country upon which much of Asia depends for trade scored a business sentiment subindex of 75, up from 72 three months prior. In nearby Japan, sentiment hit its highest-ever with a subindex of 83 compared with 61 in the previous quarter and an average of 58 in the survey´s eight-year life.