Asian businesses predict different recovery times from sars

New findings from the Grant Thornton International Business Owners Survey(IBOS), released today, reveal that businesses in Asia have been negativelyaffected by SARS but predict different recovery times. Of the key countries hitby SARS during 2003, 79% of businesses negatively affected by SARS in Taiwanexpect 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. Infact, almost one in five businesses (19%) negatively affected by SARS inSingapore predict that recovery will come later than April 2004.
ASIAN BUSINESSES PREDICT DIFFERENT RECOVERY TIMES FROM SARS

In the IBOS research, business owners in regions affected by SARS, includingAsia and Canada, and those in countries linked by business to Asia, such asAustralia and New Zealand, were asked questions about the effect of SARS.Unsurprisingly, Hong Kong tops the table for businesses affected by SARS, with88% of businesses negatively affected and 45% badly or very badly affected,followed by Taiwan (68% negatively and 34% badly/very badly affected) andSingapore (62% negatively and 20% badly/very badly affected).

Kon Yin Tong, Managing Partner of Foo Kon Tan Grant Thornton in Singaporecommented "For Singapore, the effect of SARS has been devastating.Singapore is a gateway for travel to many other countries. The transparent andstringent controls exercised at the height of the epidemic and the fear ofcatching the virus led to a slump in travel that took a heavy toll on theeconomy."

Looking beyond Asia, 32% of businesses in Canada said they have been negativelyaffected by SARS. However, when the analysis is made by region, there is astriking split. 44% of businesses in Ontario (including Toronto which was hit bythe biggest outbreak of SARS outside Asia) said they have been negativelyaffected by the outbreak, compared to 26% in the rest of Canada. Overall, overone in ten (12%) of businesses negatively affected by SARS in Canada predictthat recovery will come later than April 2004.

The impact of SARS has also been felt in countries where no outbreak occurred. Asignificant number of businesses in Australia (29%), New Zealand and Japan (both27%) felt that they have been negatively affected by SARS.

Peter Sherwin, Chairman of Grant Thornton in New Zealand, commented "We arenot surprised that SARS has had such an impact on New Zealand as there has beena reduction in the number of tourists travelling around the Asia Pacific Regionand this has impacted on many tourism related sectors from direct tourismactivities to the retail sector."

In the top three affected countries - Hong Kong, Taiwan and Singapore - theeffect on sales rather than production is felt the most. 62% of businessesnegatively affected by SARS in Singapore say sales were affected, while 56% inTaiwan and 51% in Hong Kong say the same. In Canada it is a similar story with48% of businesses negatively affected by SARS reporting that sales have beenaffected.

Earlier released data from IBOS shows a mixed view about economic fortunes inAsia. In the survey as a whole, there is a significant swing to optimism aboutthe economy among business owners. India tops the league table of being the mostoptimistic country with an optimism/pessimism balance (*see note below) of +83%.Structural economic problems keep Japan at the bottom of the table for a secondyear running with a balance of -46%, while there is a dramatic swing to optimismin Hong Kong - from a balance of -30% last year to +51%. Indonesia and Taiwanare also positive but the Philippines and Singapore remain pessimistic.

Notes to editors

The Grant Thornton International Business Owners Survey (IBOS) was carried outamong 6600 owners of medium sized businesses from 26 countries between 1September and 31 October 2003. IBOS began in 2002 and builds on the EuropeanBusiness Survey (EBS) which Grant Thornton ran for the previous ten years. Theresearch was conducted by Experian Business Strategies Limited and WirthlinWorldwide.

* the figure is the percentage balance of the respondents who are optimistic and those who are pessimistic