August 26, 2015
US companies remain generally optimistic about business prospects in the Association of Southeast Asian Nations (ASEAN), according to the annual ASEAN Business Outlook Survey, released today by the U.S. Chamber of Commerce and the American Chamber of Commerce in Singapore . In a poll of 471 senior executives representing U.S. companies in all ten ASEAN countries, 72 percent reported that their company’s level of trade and investment in ASEAN has increased over the past two years, and an overwhelming 86 percent of respondents expect it to increase over the next five years.
“The ASEAN region continues its solid growth despite regional and global economic headwinds, and this survey demonstrates that U.S. business remains confident about prospects in ASEAN,” said Tami Overby , U.S. Chamber of Commerce Senior Vice President, Asia . “However, this confidence cannot be taken for granted. We have also seen a modest, but clear, downward drift over the past several years, in terms of some of overall indicators of optimism.”
Over half (53 percent) of respondents said that ASEAN markets have become more important in terms of their companies’ worldwide revenues over the past two years; this is ten percentage points lower than reported two years earlier. In addition, two-thirds (66 percent) of respondents this year expect ASEAN to become more important in terms of worldwide revenues over the next two years; while still high, this is 7 percentage points lower than two years earlier.
“In many ways, 2015 will be a landmark year for ASEAN,” said AmCham Singapore Executive Director Judith Fergin. “While the launch of the ASEAN Economic Community (AEC) will strengthen ASEAN’s attractiveness to investors, the priorities ASEAN sets for the post-AEC agenda will determine the pace of development across the region.”
In terms of future priority areas of work to enhance regional economic integration, survey respondents placed the greatest emphasis on overcoming non-tariff barriers to trade, increasing transparency, and promoting good governance.
“This means that policymakers in ASEAN – like everywhere else around the globe – must maintain and improve their competitiveness and attractiveness to investment,” Overby said. “For the United States , it means that we need to continue to work in partnership with ASEAN to identify the policies that will best promote long-term economic growth to the benefit of both ASEAN and the United States. The TPP is a huge part of this picture for the ASEAN countries that are participating in it, and we continue to encourage those countries that are not to consider joining.”
U.S. companies identified a variety of concerns and impediments to their growth in the region. As in previous years’ surveys, corruption was the top issue across ASEAN, cited by the majority of respondents in all countries except Brunei and Singapore. American companies also highlighted 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 percent 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.
“This year’s ASEAN Business Outlook Survey clearly demonstrates that American investors remain strongly positive about business prospects across the region. It also points to important areas where continued progress along the continuum of ASEAN integration has the potential unleash enormous additional opportunities for growth,” Fergin stated. The complete survey is available here. For more on this topic, a PowerPoint presentation is available here.