TOP TEN CONCERNS OF CFOs
Consumer demand moves higher on the list of worries in Asia.
By Don Durfee

So far, Asia’s economic waters remain calm. China’s factories still churn out toys, India’s BPO centers are taking calls, and the enterprises of Southeast Asia continue to post strong results.

But the region’s CFOs can see the barometer falling. Our latest list of top CFO concerns, drawn from the Duke University/CFO magazine Global Business Outlook Survey, shows that consumer demand is now the top external worry for companies in Asia. Predictably, exporters are the most worried—demand has already stumbled in the United States.

Those who sell mainly within the region aren’t sanguine, either. “Consumer demand is still buoyant for us, but we expect it to be affected in the next year,” says Theo Renard, CFO of Singer Asia, which distributes consumer durables throughout the Asia-Pacific market.

Other external worries for Asia’s CFOs include the cost of fuel, the slide of the U.S. dollar, the ongoing credit crisis, and currency rates. The soaring price of oil hasn’t affected all parts of Asia equally. In some cases the fall of the U.S. dollar, the currency of exchange in world oil markets, is offsetting the fuel price rise. That’s true in India. “We aren’t too worried about the cost of oil,” says Mahesh Verma, chief general manager of finance for India’s Interarch Building Products. “The economy has been able to absorb the increase. But that could change if the price tops US$110 per barrel.” Indians may have to start worrying, too: as of press time, the price of oil had reached US$114.

Within their companies, Asian CFOs cite forecasting as their main concern. Forecasting has long been vexing for finance and that’s especially true now, given volatile markets and economic uncertainty. Labor worries remain high on the list, as they have been in previous surveys. “Getting good people and keeping them continues to be a challenge,” says Verma. “It’s too difficult to find employees from outside the company, so we are now focusing training and upgrading the skills of our current employees.”