Investment Continues to Rise in Asia Pacific

 

The study, 'Towards resilience and growth: Asia Pacific business in transition', surveyed nearly 500 business leaders on their attitudes towards doing business in the region. It was released on October 5 at a meeting of the Asia Pacific Economic Cooperation (APEC) in Bali, Indonesia.

 

The survey found confidence among Asia Pacific-based executives on the rise. Some 42 percent of executives say they are ‘very confident’ of revenue growth in the coming year, up from 36 percent last year. In a longer term, 52 percent say they are confident of growth over the next three to five years, about the same as in 2012.

 

According to the survey, the trend towards urbanisation in many Asia Pacific economies, the emergence of the local middle-class, and the need for infrastructure development are the main reasons driving the increase in confidence. 

 

"Executives in the Asia Pacific region are in the midst of a major transformation taking place within the region, driven by a gradual but steady rise in income and economic opportunity for millions of people," says Dennis M. Nally, Chairman of PricewaterhouseCoopers International Ltd. "While overall confidence in growth in Asia Pacific remains undiminished, APEC economies now also face many of the uncertainties of slower growth, previously limited to the more developed markets."

 

In the survey, executives were also asked to identify their 'dark horse' pick – an Asia Pacific economy that could surprise with more business opportunity than is currently expected. Indonesia was the top pick, followed by Myanmar, China, the Philippines, and Vietnam. Among the most cited attractive qualities were expanding middle classes, ample natural resources, increasing transparency, infrastructure improvement plans and political stability.

 

According to the survey, nearly 90 percent of Asia Pacific CEOs say their growth strategies are influenced by the growing market of middle-income consumers. And nearly half of investment increases are focused on new products, services and distribution - growth areas for serving the growing middle class.

 

The survey also shows that about one in five CEOs is pursuing mobile-enabled products and services such as transactions.

 

Developing broadband network and urban transport will bolster economic growth, as will change in regulatory and legal barriers and trade infrastructure, as stated in the survey.

 

Regulatory consistency across the region could unleash additional investment. A fifth of CEOs say that if rules concerning intellectual property, corporate governance and services are harmonised they are ‘highly likely’ to invest more.

 

The multiple trade discussions among APEC economies are welcomed by about 70 percent of regional CEOs, but 22 percent also see them leading to more uncertainty and administrative costs, according to the survey.

 

 “Investment prospects are looking positive across Asia Pacific,” says Mr Nally. “However, if governments use the APEC meeting in Bali to effectively tackle CEOs’ concerns about regulatory and legal barriers, and to speed up progress on trade negotiations, this could unleash an even greater wave of new investment and help secure CEO confidence in the region.”