US companies in Asean expect drop in revenue contribution, but eager to continue investing

There is greater optimism from companies in Singapore with regard to Asean's contribution to revenues. ST PHOTO: KUA CHEE SIONG

SINGAPORE - American companies based in Asean are expecting a drop in revenue contributions to businesses in the near term, a poll by the American Chamber of Commerce in Singapore (AmCham) has found.

But despite the economic uncertainty, many - more than three-quarters of those surveyed - are eager to continue investing in the Asean market over the next five years.

The poll also found that there is greater optimism from companies in Singapore with regard to Asean's contribution to revenues.

Some 50 per cent of respondents in Singapore said they expect their profits in Asean to increase, compared to 26 per cent of respondents in Malaysia.

The 2021 ASEAN Business Outlook Survey, an annual publication, surveys senior business executives from US companies across Asean on American business activity in Southeast Asia.

The findings were released late Wednesday night (March 24) after a virtual discussion held by Amcham.

The report noted that despite the Covid-19 pandemic and the diversity of the region, Asean continues to be a vital market for American businesses with its robust and growing middle class; the continuing focus on improving infrastructure; growing regional integration and availability of trade and investment opportunities in the region.

Within Asean, Singapore is the US' largest trading partner, accounting for almost 25 per cent of total US trade with the region, at a value of USD$57.6 billion (S$77.5 billion). More than 4,500 American firms have operations in the country.

AmCham chief executive Lei Hsien-Hsien said Asean is a vital trading partner to the US.

"Despite the economic impact of Covid-19, the region continues to attract high levels of investment from US companies," said Dr Lei.

"This partnership is crucial to the region's recovery from Covid-19 as we undergo a transformation of our society and businesses.

"Overall, there is growing optimism in Asean as leaders and businesses demonstrate resilience along with a spirit of innovation and creativity that will support regional stability, sustainability and growth."

The poll also found that over 70 per cent of the Asean-based corporate respondents have plans to expand operations in Asia-Pacific in the next five years.

Over three-quarters of respondents also expressed a positive sentiment towards the US, as compared to over half in the previous year.

The poll findings "reaffirms that US businesses will continue to invest in the region and to build strong partnerships to realise growth opportunities", noted AmCham.

"This partnership with Asean will continue to provide US businesses with a sustainable platform for technology, innovation, enterprise, and sustainability."

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