Apart from China and India, what other opportunities does Asia hold for
UK companies with international growth aspirations? Our ASEAN report looks at
the economic and business trends that will shape the growth trajectories of a
number of dynamic countries in Southeast Asia over the next 12 months and
beyond.
We’ve drawn economic data from
the International Monetary Fund (IMF) and business sentiment data from the Grant Thornton
International Business Report (IBR), a quarterly survey of 3,000 businesses
in 40 economies, to highlight the challenges and opportunities in the region.
Businesses in five ASEAN
economies were interviewed for this IBR report: Malaysia, the Philippines,
Singapore, Thailand and Vietnam.
Which countries are in the ASEAN
region?
The Association of Southeast
Asian Nations (ASEAN) was established on 8 August 1967 by Indonesia, Malaysia,
the Philippines, Singapore and Thailand to accelerate economic growth and
expand trade. Brunei Darussalam, Vietnam, Laos PDR, Myanmar and Cambodia have
since joined the group.
In 2011, the combined economies
of ASEAN accounted for 3.1% of global output. The largest members are
Indonesia, which accounts for 39% of regional output, Thailand (16%), Malaysia
(13%), Singapore (12%) and the Philippines (10%).
ASEAN growth and business
optimism
Despite the slowdown in the
global economy as a result of the continuing sovereign debt crisis in the
eurozone, the region is expected to grow robustly in the medium-term. In the
period 2012-16, these economies are expected to expand by 10% per annum on
average, double the rate of the global economy. This growth is expected to
account for 6.5% of total global growth over the next five years, increasing
the share of global output of the ASEAN region to 3.9% in 2016.
Business optimism slipped
slightly in the ASEAN region in Q2-2012, falling from net 27% to net 23%.
Globally, business confidence picked up slightly to net 23%, up from net 19% in
Q1-2012 on the back of improvements in mainland China and the United States.
Within the region there are some
significant variations in business confidence. Businesses in the Philippines
remain very optimistic about their economy over the next 12 months (90%),
behind only Peru. Businesses in Malaysia are much less confident (0%), with
Singapore (12%), Thailand and Vietnam (both 8%) also lower down.
ASEAN growth constraints
A lack of skilled workers is the
key constraint on growth for businesses in the ASEAN region, cited by 43% of
businesses. It is also cited as a major constraint by businesses in the wider
APAC (ex.Japan) region (37%), well above the global average (28%). This lack of
talent is a particular problem for businesses in Singapore (53%), Malaysia and
Vietnam (both 46%).
The cost of finance is also cited
as a major growth constraint by ASEAN businesses (32%), led by Vietnam (50%).
Globally, regulations and red tape emerges as the top growth constraint (34%),
but only Thailand in the ASEAN region comes in above this figure (40%). In Vietnam,
the slowdown in global trade is a particular concern – shortage of
orders/reduced demand emerges as the top constraint (56%).
Read the full story
You can download our full IBR
report as a PDF here: Focus on ASEAN.
It contains further profiling and
includes forecasts for revenue and profit, employment, inflation and
investment, as well as news on the new ASEAN Economic Community (AEC) which
aims to establish regional economic integration by 2015.
Also check out our information on
how UK companies can achieve international expansion on our Grow
Global pages.
Business & Investment Opportunities
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