Positive Outlook in ASEAN for American Companies

Posted by Reading Time: 2 minutes

Aug. 29 – According to the 2012/13 ASEAN Business Outlook Survey the majority of U.S. companies operating in the ASEAN region expect to see continued growth in their Asian operations. The survey, conducted by the U.S. Chamber of Commerce and their regional affiliate AmCham Singapore, found that 90 percent of respondents will increase their trade and investment in the ASEAN region over the next five years, with 85 percent expecting growth in profits during the current fiscal year.

In their survey, the U.S. Chamber of Commerce polled 475 executives from American companies with operations in ASEAN to gauge their outlook and success in the region.

Vietnam and Thailand ranked as the most popular destinations for market expansion by American companies, followed by Singapore, the Philippines, Indonesia and Myanmar. The economic feasibility for U.S. companies operating in ASEAN also improved, with the number of companies “facing significant financial constraint” in the region falling across the board since 2009.

“ASEAN has the opportunity to position itself at the center of a very exciting evolving regional trade architecture. This survey shows that U.S. companies are thinking regionally, and as ASEAN continues to integrate, U.S. companies will need to increasingly focus on strategies to realize ASEAN’s potential,” said U.S. Chambers’ Asia Vice President Tami Overby.

Continued economic integration among the ASEAN countries was seen as an important requisite for continued success in the region by a majority of survey respondents. Free trade agreements were also seen as important, with 47 percent of companies benefiting from the ASEAN-China agreement, 37 percent benefitting from the ASEAN-India agreement and 35 percent benefitting from the ASEAN-Japan agreement.

Companies with operations in China also rated the importance of diversification into the ASEAN region as more important than they did in 2011.

Several strengths in the ASEAN region were highlighted in the study, including sentiment towards the U.S., governmental stability, personal security, lease costs and availability of inexpensive labor, all of which were ranked highly in a majority of ASEAN countries. Infrastructure concerns, regulations and corruption were cited as potential drawbacks to operating in ASEAN.

Singapore received the greatest satisfaction rating, with companies citing its governmental business incentives, friendly tax structure and lack of corruption as positive benefits of doing business in the country. Malaysia also received a high score thanks to its efficient customs procedures, availability of raw materials and developed infrastructure.

You can access the full 2012/13 ASEAN Business Outlook Survey here.

Update: The U.S. Chamber of Commerce and AmCham Singapore have also recently released their 2014 ASEAN Business Outlook Survey, which focuses on the future expectations of U.S. companies operating inside of ASEAN.

Optimism remains high among a majority of companies operating in ASEAN, with 84 percent of executives expecting increased revenue in 2014. Indonesia, Vietnam, Thailand and Myanmar were ranked as the most desirable locations in ASEAN and 19 percent of executives reported plans to expand into these markets within the next two years.

You can read the full report here.

You can stay up to date with the latest business and investment trends across Asia by subscribing to Asia Briefing’s complimentary update service featuring news, commentary, guides, and multimedia resources.

Related Reading

ASEAN Report: FDI Flows at a Record High

Report: U.S. Should Prioritize Engagement with ASEAN

ASEAN Corporate Governance Scorecard