New findings from the Grant Thornton International Business Owners Survey (IBOS), released today, reveal that businesses in Asia have been negatively affected by SARS but predict different recovery times. Of the key countries hit by SARS during 2003, 79% of businesses negatively affected by SARS in Taiwan expect recovery by the end of 2003, while 77% in Hong Kong predict the same. However, in Singapore, a fewer number – 62% – expect recovery this year. In fact, almost one in five businesses (19%) negatively affected by SARS in Singapore predict that recovery will come later than April 2004.
In the IBOS research, business owners in regions affected by SARS, including Asia and Canada, and those in countries linked by business to Asia, such as Australia and New Zealand, were asked questions about the effect of SARS. Unsurprisingly, Hong Kong tops the table for businesses affected by SARS, with 88% of businesses negatively affected and 45% badly or very badly affected, followed by Taiwan (68% negatively and 34% badly/very badly affected) and Singapore (62% negatively and 20% badly/very badly affected).
Kon Yin Tong, Managing Partner of Foo Kon Tan Grant Thornton in Singapore commented “For Singapore, the effect of SARS has been devastating. Singapore is a gateway for travel to many other countries. The transparent and stringent controls exercised at the height of the epidemic and the fear of catching the virus led to a slump in travel that took a heavy toll on the economy.”
Looking beyond Asia, 32% of businesses in Canada said they have been negatively affected by SARS. However, when the analysis is made by region, there is a striking split. 44% of businesses in Ontario (including Toronto which was hit by the biggest outbreak of SARS outside Asia) said they have been negatively affected by the outbreak, compared to 26% in the rest of Canada. Overall, over one in ten (12%) of businesses negatively affected by SARS in Canada predict that recovery will come later than April 2004.
The impact of SARS has also been felt in countries where no outbreak occurred. A significant number of businesses in Australia (29%), New Zealand and Japan (both 27%) felt that they have been negatively affected by SARS.
Peter Sherwin, Chairman of Grant Thornton in New Zealand, commented “We are not surprised that SARS has had such an impact on New Zealand as there has been a reduction in the number of tourists travelling around the Asia Pacific Region and this has impacted on many tourism related sectors from direct tourism activities to the retail sector.”
In the top three affected countries – Hong Kong, Taiwan and Singapore – the effect on sales rather than production is felt the most. 62% of businesses negatively affected by SARS in Singapore say sales were affected, while 56% in Taiwan and 51% in Hong Kong say the same. In Canada it is a similar story with 48% of businesses negatively affected by SARS reporting that sales have been affected.
Earlier released data from IBOS shows a mixed view about economic fortunes in Asia. In the survey as a whole, there is a significant swing to optimism about the economy among business owners. India tops the league table of being the most optimistic country with an optimism/pessimism balance (*see note below) of +83%. Structural economic problems keep Japan at the bottom of the table for a second year running with a balance of -46%, while there is a dramatic swing to optimism in Hong Kong – from a balance of -30% last year to +51%. Indonesia and Taiwan are also positive but the Philippines and Singapore remain pessimistic.