ASEAN Business Outlook Survey 2014

Each year AmCham Singapore collaborates with the U.S. Chamber of Commerce and other AmChams in the region to survey senior members from U.S. companies to gather insights about business conditions and sentiment in Asia-Pacific.

 

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The findings of the ASEAN Business Outlook Survey are presented in intimate discussions with government representatives from all 10 ASEAN countries, including multiple government agencies in Singapore.

 

AmCham’s annual ASEAN Business Outlook Survey shares the insights of senior American business leaders located across the ASEAN region. These respondents are charged with making investment decisions on behalf their companies, offering them a unique opportunity to shape the character of development across ASEAN. This year’s respondents continue to be optimistic about business prospects in ASEAN, but also sensitive to challenges to growth in the region.

 

 

 

 

Trade and Investment in ASEAN

 

ASEAN markets are becoming increasingly important to U.S. companies in terms of worldwide revenue and 91% of respondents expect their company’s level of trade and investment in the ASEAN region to increase over the next five years. Compared with 2012, respondents are optimistic about their profit outlook in ASEAN for the rest of this year and even more optimistic about next year, with 84% of business leaders across the region expecting an increase in profits in 2014. The most sought after locations for business expansion in ASEAN in order of interest are: Indonesia, Vietnam, Thailand and Myanmar. We continue to see plans for diversification of operations from China into ASEAN with 19% of respondents indicating that they plan to make such a move in the next two years.

 

Current Local Business Environment

 

While U.S. business representatives view the business outlook in ASEAN very favorably, respondents expressed substantial concern regarding corruption, which was the top issue for respondents in all countries except Singapore and Brunei. Over 70% of respondents in Indonesia, Laos, Thailand, and Vietnam indicated that they were dissatisfied with the corruption in their country. Satisfaction with personal security and sentiment toward the U.S. both remained high across the ASEAN region, with the exception of Malaysia (34% satisfaction) for personal security and Laos (44% satisfaction) for sentiment towards the United States. Business leaders in Singapore indicated high levels of satisfaction across ten of the sixteen factors listed in the survey, indicating that Singapore continues to have a receptive business environment.

 

Change in Local Business Environment from 2008 to 2013

 

In our historical analysis of the change in satisfaction across sixteen factors from 2008 to today, we found that some countries have seen remarkable improvement, whereas others have had more mixed results. The Philippines exhibited dramatic improvement across almost all local and business environment factors, with a 50% improvement in the stability of its government and political system leading the way. In contrast, two of the largest decreases in satisfaction were in Vietnam and Indonesia where respondents indicated that the government and political systems are viewed as less stable than they were five years ago. Additionally, Malaysia saw a 17% decrease in satisfaction in personal security, which is a growing concern of American businesses operating in the country.

 

The ASEAN Business Outlook Survey is the only study of its kind and showcases the perspectives of senior business leaders in ASEAN. The report has a global readership and is relied on by both business leaders and policymakers across the region. The report gives policymakers a unique window into the sentiments of business leaders, and offers them a chance to address identified issues in order to attract greater business investment in their respective countries. Additionally, the report provides business leaders insights into the opinions and projections of their counterparts on the ground throughout the region.

 

2013 marks the twelfth year of the survey and we were very excited to expand our survey to include respondents from all ten ASEAN countries, adding Brunei, Laos, and Myanmar for the first time. AmCham presented the survey results jointly with the U.S. Chamber of Commerce at the 45th ASEAN Economic Ministers Meeting in Brunei on August 21st.

 

Download the full press release. (PDF)
Download the 2014 ASEAN Business Outlook Survey. (PDF)

 

To view the full report, click on the image below.

To view the full report, click on the image below.

 

Highlights of findings from respondents from each country

 

Brunei
Brunei is one of two countries in ASEAN where the majority (82%) of respondents indicate satisfaction with a lack of corruption. Respondents in the country are also highly satisfied with personal security, sentiment towards the U.S., and the stability of the government and political system. Business leaders do indicate challenges in finding trained personnel in the country.

 

Cambodia
Major strengths cited by respondents in Cambodia include availability of low cost labor, positive sentiment towards the U.S., and a high level of personal security. Corruption remains a problem, as 65% of respondents expressed concern; however, this is down from 2012.

 

Indonesia
Indonesia was rated as the top destination in ASEAN for expansion, despite the many challenges companies cite in doing business there. Overwhelmingly, corruption was identified as the greatest drawback in Indonesia. Other significant challenges include moving products through customs, insufficient infrastructure, and problematic laws and regulations.

 

Laos
Personal security and positive sentiment towards the U.S. are strengths in Laos, as they are across ASEAN. Challenges for U.S. companies in Laos include corruption, lack of trained personnel, insufficient infrastructure, and problematic laws and regulations.

 

Malaysia
100% of respondents in Malaysia said that they do not face any significant challenges importing goods into the country. The Malaysian government has been working to implement more efficient customs procedures, and respondents seem to have noticed an improvement. The positive sentiment towards the U.S., and the quality of infrastructure, were viewed as strengths for Malaysia. Satisfaction with personal security, however, has decreased since 2012, giving Malaysia the lowest ranking in ASEAN.

 

Myanmar
49% of respondents across the region indicate investment in or plans to invest in Myanmar. However, the U.S. business leaders currently operating in Myanmar cite ten out of the sixteen business factors in the survey as challenges. The highest levels of dissatisfaction are with infrastructure and problematic laws and regulations. Housing costs and office lease costs also have high levels of dissatisfaction, as demand for real estate in Yangon exceeds supply.

 

Philippines
Satisfaction in the Philippines increased across fourteen of the sixteen business factors over the last five years, led by a 50% increase in satisfaction with the stability of the government and political system. Today, 87% of respondents are satisfied with the availability of trained personnel in the Philippines, the highest percentage in ASEAN. Corruption, insufficient infrastructure, and the tax structure remain challenges in the country, but it is clear business leaders have seen significant progress in recent years.

 

Singapore
Singapore-based respondents cite greater satisfaction across polled business factors than any other ASEAN country. Major strengths in Singapore include a stable government and political system, and laws and regulations, with 90% and 84% of respondents, respectively, indicating satisfaction. Challenges for businesses in Singapore, as in recent years, include lack of low cost labor, high office lease costs, and high housing costs.

 

Thailand
Respondents see personal security, positive sentiment towards the U.S., and infrastructure as major strengths in Thailand. Corruption is cited as the biggest challenge with 71% of respondents indicating dissatisfaction. Satisfaction with the tax structure in Thailand has increased by 13% since 2008.

 

Vietnam
Strengths in Vietnam are the availability of low cost labor, positive sentiment towards the U.S., and the level of personal security. Respondents indicate that corruption is one of the biggest problems in Vietnam with 70% of respondents indicating dissatisfaction. Satisfaction with new business incentives offered by the government, stability of the government and political system, and the level of personal security all have significantly decreased over the last five years.

 

To view last year’s report, the 2012/2013 ASEAN Business Outlook Survey, click here.

 

For more information, contact:
Thomas McNutt
Head of Regional & Public Affairs
AmCham Singapore
E-mail: dwatson@amcham.org.sg