Bangkok--7 Jun--Aziam Burson-Marsteller
Confidence in Thai Market May Lessen as Competitive Pressures From Regional Countries Increases
Senior executives in American companies in ASEAN are increasingly confident of business growth, workforce expansion and profit growth for their business in ASEAN markets and are generally optimistic in their outlook for the world economy.
A survey released today shows 80% of American senior managers expect to expand their business operations in the region while only 3% think operations will shrink.
Most (62%) also believe the ASEAN market will be more important to their company’s global revenues in the next two years, thanks largely to economic recovery and improvements in infrastructure.
Sixty-eight per cent are optimistic of profit growth this year, with members from Malaysia (75%) and Vietnam (76%) being particularly confident of an increase in profits.
AmCham Outlook is the fifth annual survey of members of American Chambers of Commerce (AmChams) in the ASEAN region who together represent an estimated US$50 billion of regional investment.
The Executive Director of AmCham, Thailand, Ms Judy Benn, said today the results indicate that there was a fundamental sense of confidence in the Thai market.
“Our members continue to regard Thailand as important to US investment.Thailand, and more broadly, the ASEAN region, hold significant potential for growth and increased US investment, subject to improvements in liberalizing markets, enhancing the country’s infrastructure and taking more practical and comprehensive steps to improve Thailand’s competitiveness,” said Ms Benn.
Amcham members in ASEAN were optimistic of business growth with those from Malaysia being particularly upbeat with 90% expecting business expansion.
Most AMCHAM members in ASEAN (58%) also expect local workforces to expand, with over half expecting local workforce increases of 10% to 50% on current levels, and only 7% expecting decreases. Members from Singapore, Thailand and Vietnam were most positive about local workforce expansion.
AMCHAM member companies employ more than 250,000 Thai nationals. Nearly 70% of those members surveyed in Thailand expect to increase the number of local employees in Thailand in 2006.
Most expect the expatriate workforce, however, to remain the same, with 13% expecting a decrease.
Corruption and dissatisfaction with local customs and taxation and revenue offices remain impediments to doing business in the region(except in Singapore), although dissatisfaction levels have mitigated slightly.
“Other than in Singapore, corruption continues to be identified as the major impediment to doing business in the region and is a source of high dissatisfaction for members,” Ms Benn said. “This, in combination with weak laws and regulations, has a significant effect on investment decisions and is a vital competitiveness issue, said Ms Benn.
Sixty seven percent of members in Thailand expressed concern with corruption, down slightly from 69% last year. Forty five percent of AMCHAM members expressed concerns about local protectionism, an increase of 3% in comparison to last year.
“The US is the second largest source of foreign direct investment and represents the largest market for Thailand exports. In 2005, Thailand’s exports to the US were valued at more than US$ 20 billion,” said Ms Benn. “We are committed to broadening this presence and further deepening our commercial and economic ties even as Thailand’s comes under increasing pressure from its increasingly competitive and investor friendly neighbors in ASEAN.”
Key Findings of Survey
American business in ASEAN is more optimistic on world economy with 42% expecting the world economy to do better in 2006, compared to 29% last year.
4 in 5 American senior managers expect business growth.
ASEAN’s importance to global economy seen as increasing. 62% believe the region will be more important to their company’s revenues in the next two years. Recovery of economy (71%) and improvements in infrastructure (52%) cited as key reasons.
More than half expect their workforce to expand with almost half citing increases of 10% to 50%.
Nearly 70% of members in Thailand cite increasing local protectionism as a major concern
Majority (68%) expect profit growth, up from 61% in 2005. Few (9%) expect profit decreases.
Corruption, protectionism and governance remain major factors impacting business in the ASEAN region.
Lack of infrastructure remains a problem in Indonesia, The Philippines and Vietnam.
For further information, contact:
James Best
Aziam Burson Marsteller
02-252-9871