TOKYO • Business confidence among Asian companies rose between October and this month to the highest in almost seven years due to robust consumption and global trade, a survey showed.

The Thomson Reuters/Insead Asian Business Sentiment Index, representing the six-month outlook of 94 firms, rose to 78 for the December quarter from 69 three months before. The index reached its highest since between January and March 2011. A reading above 50 indicates a positive outlook.

Improvement in sentiment in Australia, China and South Korea drove gains in the overall index. Sentiment in Indonesia and Thailand was also strong, showing that many countries in Asia continue to benefit from accelerating global growth.

In Singapore, the sentiment sub-index rose to 79 from 64.

"The index shows that the slow strengthening that we have seen in the world economy has lifted business sentiment in Asia," said Dr Antonio Fatas, a Singapore-based economics professor at global business school Insead.

The index measuring sentiment in Australia rose to a record high of 92 between October and this month from 69 in the previous quarter. The country's ruling coalition has recovered from a dual-citizenship crisis that threatened to throw policymaking into turmoil.

Signs of a rebound in consumer spending, Chinese demand for Australian metals, and growing capital expenditure in other sectors have also underpinned sentiment.

China, upon which much of Asia depends for trade, saw its sub-index rise to 83 to reach the highest since the third quarter of last year.

South Korea's sub-index rose to 83 from 50 in the previous quarter to reach the highest since the second quarter of 2011, as international pressure has so far slowed the pace of North Korea's missile tests for its nuclear weapons programme.

The sub-index for Indonesia slipped to 92 in the fourth quarter from 100 in the previous quarter but remained at a high level. Sentiment in Thailand and India improved, while sentiment in Taiwan fell to the lowest level in more than a year.

The index for Malaysia weakened to 64 from 75 as respondents expressed concern about consumer sentiment. Business sentiment for the Philippines fell to 70 from 83 previously, while in Japan sentiment eased to 70 from 75 in the previous quarter.

The International Monetary Fund and the Organisation for Economic Cooperation and Development have raised their global growth forecasts for this year due to strong trade, consumer spending, and investment in many major economies.

However, the outlook is not without risk. Respondents to the survey showed that companies' biggest concern was a sudden correction in asset prices.

United States stocks have repeatedly set record highs this year, and stock markets in most other countries have rallied strongly due to expectations of faster growth.

Many companies have concerns about protectionism, which can not only hurt exports but also become a barrier to making acquisitions overseas.

Of companies surveyed, nine respondents identified political instability and geopolitical risks as their biggest concerns, because events on one side of the globe, such as Britain's negotiations to leave the European Union, can have consequences elsewhere.

"The impact of Brexit affected British demand for tourism abroad," said the senior investor relations manager at Minor International, Thailand's leading hotel and restaurant operator.

REUTERS