American companies remain cautiously optimistic about business prospects in the Association of Southeast Asian Nations region, according to an annual survey by the American Chambers of Commerce in Asean member countries.
The annual ASEAN Business Outlook Survey, released on 26 August by the Asean chambers and the US Chamber of Commerce, surveyed 471 senior executives representing US companies in all ten ASEAN nations
More than 70% reported that their company’s level of trade and investment in Asean has increased over the past two years, and 86% of respondents expect it to increase over the next five years.
Despite investor confidence, optimism has declined over the years. More than half (53%) of respondents said Asean markets have become more important to worldwide revenues over the past two years, down 10% points lower than reported two years earlier. In addition, 66% of the executives this year expect Asean to become more important in terms of worldwide revenues over the next two years; while still high, this is seven percentage points lower than two years earlier.
However, investor confidence has been steadily increasing in countries, such as Malaysia, Vietnam and Cambodia. For example, investor satisfaction with new business incentives offered by the government has risen by 25 % over the past five years in Malaysia.
Corruption was the top issue of concerns and impediments to their growth across Asean, cited by the majority of respondents in all countries except Brunei and Singapore. Also highlighted were 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. 77% of respondents to this year’s survey reported that exchange rate volatility has a “significant” or “somewhat significant” impact on their business operations in the region.