By Nisha Ramchandani

SENIOR financial executives across Asia and Australia are still bent on investing in growth despite the challenging economic environment elsewhere, armed with experience from previous downturns as a guide.

Eighty per cent of companies polled in Asia and Australia expect to see their industry grow over the next year, possibly due to a lack of direct impact from the credit crunch, according to the American Express/CFO Research Global Business & Spending Monitor. As such, these companies plan to grow by getting into new markets, boosting production capacity, introducing new products and raising headcount.

The cost of energy and capital are the two top obstacles that might impede expansion in Asia and Australia, closely followed by the cost of raw materials.

Companies in this region are also more likely to return profits to shareholders through dividends or buybacks than their global counterparts (31 per cent versus 19 per cent). Thirty-six per cent of respondents in the US are keen to devote more capital to mergers and acquisitions, as opposed to 22 per cent in Asia and Australia, which plan instead to divert resources to capital spending and strengthening balance sheets.

Business travel is generally expected to remain at the same level or increase, though it varies from region to region. US respondents (45 per cent) are more likely to restrict domestic travel and reduce travel to unimportant events such as conferences than respondents in Asia (36 per cent) and Europe (21 per cent).

'Companies in Asia and Australia are looking for ways to maintain their growth momentum and are more optimistic than their counterparts in the US and Europe,' said Tracey Bowra, senior vice-president, global commercial cards, at American Express (Japan, Asia-Pacific and Australia).

'They are pursuing investments that will allow them to reach more customers in new and better ways - all in an effort to preserve the bottom line while promoting topline growth.'

This article was first published in The Business Times on Jun 12, 2008

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