US businesses remain committed to investments in ASEAN

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More U.S. investments will be pouring into ASEAN, according to the latest ASEAN Business Outlook Survey 2013-2014.

2013 marks the 12th year of the ASEAN Business Outlook Survey.

This survey includes responses from American business representatives in all 10 ASEAN member countries, including Brunei, Laos and Myanmar. The American Chamber of Commerce in Singapore (AmCham Singapore) and the US Chamber of commerce surveyed 475 business leaders from US companies over the period of May 1 to June 1.

American business sentiment towards ASEAN remains optimistic — 91 per cent of respondents expect their companies trade and investment in ASEAN to increase over the next five years. In contrast, only 2 per cent expect that level to decrease.

The survey also revealed that the most attractive countries for new business expansion are Indonesia, followed by Vietnam, Thailand and Myanmar.

From 2008 to 2013, the Philippines showed the greatest improvement in its business environment.

Compared with 2012, business executives are also optimistic about their profit outlook in ASEAN for the rest of 2013 and are even more positive about 2014, with 84 per cent of executives expecting an increase in profits.

Still, the majority of respondents are less likely to diversify their businesses from China into ASEAN.

Simon Kahn, chairman of AmCham Singapore, said: “Year over year, there’s been a slight decrease in the percentage of US businesses who are considering moving their operations from China into ASEAN. However just a slight decrease.

“US businesses are looking at a more balanced approach in terms of how they invest across the region and I think they’re also considering the fact that China as a market is a very important market and they want to be closer to their customers in China.”

Despite the general optimism about ASEAN’s business prospects, challenges remain.

Corruption was the top issue across ASEAN, with the majority of respondents across all countries — except Singapore and Brunei — expressing their dissatisfaction. Business leaders also cited cumbersome laws and regulations as well as the poor quality of infrastructure as obstacles to more investment.

As in previous years, Singapore-based respondents cite greater satisfaction across polled business factors than any other ASEAN country. These business factors range from availability of raw materials to infrastructure to personal security.

Meanwhile, US firms continued to list high labour, housing and office lease costs as key issues faced in Singapore — though that sentiment is slowly changing.

Mr Kahn added: “Singapore is a relatively high-cost market and more and more companies are not looking to have Singapore as a source of low-cost labour. They’re looking to have Singapore as a base for intellectual property and for knowledge workers rather than workers in factories.

“As for housing costs, again, this is not just an issue for US businesses but for many Singaporeans. And with office lease costs, we saw an improvement over the last five years.

“Five years ago, when we did the survey, there was a much more negative view on the cost of office leases. The availability of high-grade office space improved and we saw that in 2009 and 2010 with the expansion of the Marina Bay Financial Centre.”

The report revealed that regional economic integration efforts are important to US firms’ investment plans in the region — almost half of the manufacturing firms surveyed use the provisions of ASEAN’s free trade agreements with major trading partners to export from ASEAN.

Source : Channel News Asia | August 20, 2013


About thomasdinnocenzi

Thomas D’Innocenzi is a highly accomplished, results-focused international consultant with extensive experience in global sourcing and business development worldwide to meet evolving business needs. Tom has proven ability in implementing and managing profitable global marketing and sourcing operations. He has extensive experience in international business development to accommodate rapid growth. Skilled in building top-performing teams, bench-marking performance, and developing organizations to improve efficiency, productivity, and profitability. Experienced transition leader and change agent. Tom founded Nova Advisors with the mission of providing expert Global Business Development consulting services for companies seeking to expand their market share as an independent consultant. Tom has a network of experts and advisors throughout the Asia-Pacific region and North America. His expertise includes business development, global sourcing, manufacturing, commodities, logistics, QA/QC, FDA, regulatory compliance, sustainability, and supply chain optimization. Tom is experienced in the medical device, apparel, consumer goods and technology services verticals helping companies advance their global sourcing capabilities and develop new markets through a local and sustained approach. Located in SE Asia and the United States, Tom expands market reach to drive sales. His global sourcing strategy includes directly negotiating with commodity suppliers, supply chain networks and distributors for optimal terms based on his expertise and first-hand knowledge of the players. Contact Tom to use his consulting service to increase your global market and make global sourcing profitable for you in the Asia Pacific Region and the United States. USA Direct: +1.904.479.3600 SINGAPORE: +65.6818.6396 THAILAND: +662.207.9269
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