The latest edition of the Thomson Reuters/INSEAD survey reveals that business sentiment among companies in Asia has collapsed to the lowest levels seen in 11 years during the second quarter of the year. At least two out of every three companies surveyed highlight the ongoing coronavirus crisis as the most significant risk to their business over the next six months.

Business confidence has fallen by a third, with the business sentiment index registering a reading of 35 in Q2 2020, and falling below the 50 threshold for only the second time ever since the survey began back in 2009. In the previous quarter, when the effect of the coronavirus pandemic was just starting to be felt, the business sentiment index stood at 45.

16% of the companies that participated in the survey are worried about the risk of a deeper recession impacting their businesses in the next six months. Over 50% of firms anticipate a decline in their staffing levels and business volumes as a result of the pandemic and resulting recession.

Economics professor at INSEAD, Antonio Fatas, observes, “We ran this survey right at the edge when things were getting really bad. We can see this complete pessimism which is spread across sectors and countries in a way that we haven’t seen before.”