Countries in the BRIC region - Brazil, Russia, India and China - have expressed confidence in their prospects for the year ahead, despite the slowdown in established world markets such as the US and Western Europe.
The spring 2008 KPMG Business Outlook Survey, which surveys around 1,400 service sector firms across the BRIC region, showed the majority felt there were major opportunities for growth - although the figure is not as high as six months ago.
The survey also shows service providers are confident that revenues will rise over the coming year, with 61 per cent predicting an increase. Higher new orders, improving market conditions and the introduction of new products were cited as the main factors likely to support growth of revenues.
The principal threats to revenues were perceived to be intensifying competition, rising input costs and weaker economic conditions.
Volumes of new business placed with BRIC service providers are expected to rise at a marked pace over the coming year. Growth of new work is anticipated at 58 per cent of companies, while less than three per cent forecast a fall.
Company profitability at BRIC service providers is predicted to increase strongly over the next year, with well over half of survey respondents anticipating a rise. Again, Indian firms were the most optimistic regarding profits.
Higher profits are also set to underpin increased investment in capital, however, optimism was down slightly on last year mainly reflecting a softening in Brazil.
In addition, higher workloads are predicted to boost job creation across the BRIC nations, with around 37 per cent of service providers anticipating employment growth. Russian and Indian firms are the most upbeat. Outsourcing is also expected to increase.
Negative factors to growth are seen as increased operating costs, mainly due to escalating raw materials, dearer energy costs and rising salaries. Inflationary expectations were particularly high in Russia. Surprisingly, panellists reported that the availability of credit to their companies had improved compared with the situation prior to last summer's financial market turmoil.
Approximately 38 per cent of companies stated that this was the case, with only eight per cent of firms noting a deterioration in credit availability.
However, the cost of credit was widely reported to have risen since the start of the credit crunch, with 47 per cent of companies signalling higher borrowing costs.
Commenting on the latest survey findings, Jeremy Butler, director within the New and Emerging Markets team in Birmingham, said: "Confidence in the BRIC service sector remains buoyant according to the latest survey findings, suggesting that rapid economic expansion is set to be maintained in 2008 and into 2009.
"Companies expect fast-growing demand for services to support higher levels of activity, while strongly rising revenues and profits will be ploughed back into investment in capital."
He said that although optimism was still high, it had nevertheless fallen compared with last year. This was probably due to concerns over a slowing global economy and heightened inflationary pressures, he added.
"Nevertheless, the overwhelming feeling among companies is that business opportunities remain plentiful as domestic demand in the respective BRIC economies expands apace," said Mr Butler.
The Business Outlook Survey explores service sectors including hotels & restaurants, transport & storage, post & telecommunications, financial intermediation, renting & business activities and others.