A recent survey by Thomson Reuters and INSEAD reveals that business confidence in Asia has fallen to the lowest level in nearly 11 years on account of the raging coronavirus pandemic. The Thomson Reuters/INSEAD Asian Business Sentiment Index experienced a steep fall by 18 points to 53 for Q1 2020, representing the business outlook for the coming six months.

Although the index remains above the 50-threshold indicating optimism among businesses, expectations are that the outlook could worsen further as the number of cases continue to climb higher and impact consumer sentiment and economic activity across Asia and the rest of the world. The sentiment is likely to weaken further as leading economies in the US and Europe continue to struggle to contain the spread of the virus and its impact.

Most respondents indicated that the coronavirus pandemic remained the biggest risk to their business, followed by trade tensions and the possibility of a recession in the global economy. Things had begun to look better at the beginning of this month as China managed to bring the number of cases under control, but the spread of infections across Europe and other countries increased fears all over again.

Severe travel restrictions and shutdowns being enforced by several governments even as they unveil stimulus measures to protect their economy have heightened the risk-off sentiment in global markets, worsening business outlook. The hardest hit industries so far are aviation and travel and logistics on account of the travel restrictions.