T

he Indonesian business confidence index has slipped by 16 points to 129 since September, as companies begin to respond to rising operational costs, according to the latest report provided by Regus.

“In addition, the proportion of companies reporting revenue and profit growth has decreased,” CEO of Regus Asia Pacific Filippo Sarti said in a statement.

Regus’ report says that the number of companies reporting revenue growth had decreased to 43 percent from a figure of 61 percent six months ago. The number of companies reporting profit growth also plunged to 30 percent from 61 percent.

Mindful of the need to contain costs in the quest for sustainable growth, businesses’ identification of a shorter supply chain and increasing use of pay-as-you-go services and more flexible workspaces were the most effective cost-cutting measures for the coming months, according to the Regus report.

“Therefore, in order to grasp growth opportunities in a sustainable way, businesses are still looking to cut overheads without damaging their growth prospects,” Sarti said.

Sarti added that Regus respondents believed greater flexibility for staff could improve business stability as a platform for future growth.

“A significant proportion of businesses believe that the cost of unnecessary office space, one of the major burdens borne through the global economic downturn alongside the well documented bank lending and capital squeeze, are areas where businesses may focus their cost-cutting efforts successfully,” he said.

According to the report, 53 percent of Indonesian firms regarded the cost of unnecessary office space as the main reason for corporate distress during the current global downturn.

The report shows that respondents identified a shorter supply chain, increasing use of pay-as-you-go business services and more flexible workspaces as the areas where companies could best make savings without damaging growth prospects.

“With solutions readily available on the market for flexible workspace arrangements, there is no doubt that the number of businesses benefiting from more nimble and scalable arrangements will increase in the coming years,” he added.

Separately, a survey conducted by Bank Indonesia also showed that the Indonesian consumers’ confidence index (IKK) had fallen in March by 4.5 points to 107.3.

The decline of the Indonesian consumers’ expectation index (IEK) toward the economic situation for the next six months is a major contributor to the plunging IKK, according to the Bank Indonesia survey report.

The IEK fell by 7.9 points to 112.1 in March compared to the previous month.

Consumers’ pessimism toward economic conditions for the next six months is majorly affected by the previously planned fuel-price hike and seasonal factors, such as the upcoming Idul Fitri.

Previously, the government had planned to raise the subsidized fuel price on April 1 but the plan has been delayed because the House of Representatives rejected the proposed idea in the 2012 revised state budget (APBN-P).

Instead, the government has been given the authority in the APBN-P to adjust subsidized fuel prices if the average actual Indonesian Crude Price (ICP) deviates by 15 percent from the current assumption, which stands at US$105 per barrel, within a six-month period.