Business sentiment among Asia's top companies edged up in the first quarter, as solid improvement in the Philippines and South Korea outweighed weakness in China, India and Australia amid persistent concerns over the global economy, a ThomsonReuters/INSEAD survey showed.
The ThomsonReuters/INSEAD Asia Business Sentiment Index snapped two consecutive quarterly declines and rose to 64 in the first quarter of this year from 62 in the fourth quarter of 2013. A reading above 50 indicates an overall positive outlook.
Uncertainty about the global economic outlook and rising costs remained the biggest risk factors for the region's firms, according to the survey, which also found sentiment in the autos, retail and resource sectors improved, while confidence among companies in the building sector tumbled.
Solid gains in Japan, South Korea and regional trading hub Singapore supported the index, but weaker sentiment from China, Australia and India underscored fragile prospects for an improvement in global demand.
China's exports unexpectedly dropped 18 percent in February, fueling investor concerns over cooling growth in the world's second-biggest economy.
Chinese premier Li Keqiang said the economy faced "severe challenges" in 2014 and hinted Beijing would tolerate a slower expansion while it pushes through reforms aimed at providing more sustainable growth in the future.
"The sentiment (in China) is not great...There isn't a lot of transparency on what happens next," said Stephen Green, head of China research at Standard Chartered.
The poll, conducted by ThomsonReuters in association with INSEAD, a global management and business school, was compiled between March 3-14.
The index surveyed more than 200 of Asia's top companies in 11 economies across sectors including property, financials and tech. Companies participating in the survey included Hyundai Heavy Industries, Fast Retailing Co Ltd and International Container Terminal Services.
Of the 102 Asian companies that responded, 65 percent reported a neutral outlook, 31 percent were positive and 3.92 percent were negative in their prospects.
PHILIPPINES MOST BULLISH
Corporate sentiment in the Philippines rebounded the most in the first quarter of 2014, with all 12 respondents reporting positive sentiment that pushed the sentiment index to 100, even as the majority of them were concerned about the uncertain global economy.
Most companies in the country reported higher new orders and employment levels as massive rebuilding efforts, including the government's $3.1 billion spending plan after a devastating typhoon in early November, are set to help sustain strong economic growth this year.
Overall sentiment in Southeast Asia's $15 trillion economy was mostly positive, with Thailand being the