ASEAN Business Outlook Survey 2015

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

 

In a poll of 588 senior executives representing U.S. companies in all ten ASEAN countries, 74% reported that their company’s level of trade and investment in ASEAN has increased over the past two years, and an overwhelming 89% of respondents expect it to increase over the next five years. The profit outlook is solid, with 63% of executives expecting profit increases this year, and 81% next year. Slightly over half (53%) of the respondents expect their companies’ workforce to expand this year, while only 5% expect decreases.

 

The survey also revealed that U.S. companies take advantage of regional economic integration efforts, including ASEAN’s free trade agreements (FTAs) with Australia and New Zealand, China, India, Japan, and Korea. Nearly half (49%) of respondents report that they use the FTA to export goods from ASEAN to China. American companies’ use of the other FTAs ranges between 43-47%.

 

Current Local Business Environment

 

Although U.S. companies remain optimistic about business prospects in the ASEAN region, the survey also found substantial concerns and impediments to companies’ growth in the region. As in previous years’ surveys, corruption was the top issue across ASEAN, cited by a majority of respondents in all countries except Brunei and Singapore. American companies also pointed to burdensome laws and regulations, lack of transparency, poor quality of infrastructure, and the difficulty in moving products through customs in some countries as obstacles to greater investment.

 

ASEAN Economic Community

 

ASEAN’s efforts to more closely integrate the economies of its ten member nations are also important to U.S. companies’ investment plans in the region. 53% of respondents said that their company has a strategy based on the goals of the ASEAN Economic Community, which aims to integrate the region by 2015.

 

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.

 

Our 2015 edition marks the thirteenth year of the survey and the second year in which we have collected data from all ten ASEAN countries. AmCham Singapore and the U.S. Chamber of Commerce presented the survey results at the 46th ASEAN Economic Ministers Meeting in Myanmar on August 28th.

 

Download the full press release. (PDF)
Download the 2015 ASEAN Business Outlook Survey. (PDF)

Download the media kit.

 

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 (56%) 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 and positive sentiment towards the U.S. Corruption remains a problem, as 82% of respondents expressed concern, up from 65% last year.

 

Indonesia
Indonesia was rated as the top destination in ASEAN for expansion, despite the many challenges companies cite in doing business there. Overwhelmingly, insufficient infrastructure was identified as the greatest drawback in Indonesia. Other significant challenges include corruption, finding trained personnel, moving products through customs, and problematic laws and regulations. Satisfaction with personal security in Indonesia has increased by 24 percentage points since 2009.

 

Laos
The availability of low cost labor and personal security are strengths in Laos, as they are across much of ASEAN. Challenges for U.S. companies in Laos include corruption, insufficient infrastructure, lack of trained personnel, and problematic laws and regulations. In addition, U.S. companies are viewed less favorably in Laos than in any other country in ASEAN.

 

Malaysia
Sentiment towards the U.S., the quality of infrastructure, and reasonable office lease costs are significant strengths for Malaysia and the country enjoys moderate strengths across many business factors. In contrast, corruption and personal security remain challenges. Additionally, Malaysia continues to battle with the pitfalls of the middle income trap relative to the rapid growth potential of its ASEAN neighbors. As Malaysia moves up the value chain, the satisfaction level with the availability of trained personnel, infrastructure, and office lease costs have significantly decreased.

 

Myanmar
Myanmar is one of the most popular countries for business expansion in ASEAN, offering a ready supply of affordable labor, personal security, and positive sentiments toward the U.S. In addition, U.S. companies are viewed more favorably in Myanmar than in any other country in ASEAN. However, the U.S. business leaders currently operating in Myanmar cite eleven out of the sixteen business factors in the survey as challenges. The highest levels of dissatisfaction are with the cost of housing, infrastructure, lack of trained labor, and office lease costs.

 

Philippines
Satisfaction in the Philippines increased across nine of the sixteen business factors over the last five years, led by a 23 percentage point increase in satisfaction with the stability of the government and political system. Today, 86% of respondents are satisfied with the positive sentiments toward the U.S. and 78% with the availability of trained personnel in the Philippines, each representing the highest percentage in ASEAN. Insufficient infrastructure, corruption, the difficulty of moving products through customs, and the tax structure remain challenges in the country.

 

Singapore
Singapore-based respondents cite greater satisfaction across polled business factors than any other ASEAN country. Major strengths in Singapore include personal security, a stable government and political system, infrastructure, and a lack of corruption. Challenges for businesses in Singapore, as in recent years, include high housing costs, high office lease costs, and a lack of low cost labor.

 

Thailand
Respondents see personal security, positive sentiments towards the U.S., housing costs, and infrastructure as major strengths in Thailand. The lack of a stable government and political system and corruption are cited as the biggest challenges with 80% and 71% of respondents, respectively, indicating dissatisfaction. Increasing labor costs have also led to a 26 percentage point decrease in satisfaction with the availability of low cost labor since 2009.

 

Vietnam
Vietnam is the second most listed location for business expansion in ASEAN. Its strengths include positive sentiments toward the U.S., the availability of low cost labor, and the level of personal security. Respondents indicate that corruption is one of the biggest problems in Vietnam with 69% of respondents indicating dissatisfaction. Over the past five years, cost pressures have eased, as levels of satisfaction with the availability of low cost labor, housing costs, and office lease costs have all increased significantly. In contrast, respondents have noted a decrease in satisfaction with the business incentives offered by the government and personal security, among other factors.

 

To view last year’s report, the 2014 ASEAN Business Outlook Survey, click here.
To view the 2012/2013 ASEAN Business Outlook Survey, click here.

 

For more information, contact Dustin Watson at dwatson@amcham.org.sg.

 

For advertising enquiries, contact Amber Mizerak at amizerak@amcham.org.sg.