U.S. companies bullish on ASEAN, except Philippines

U.S. companies bullish on ASEAN, except Philippines

Dow Jones, Singapore

U.S. companies in the region are bullish on prospects for Southeast Asia except for the Philippines, with the majority planning to expand their Asian operations and increase staffing, a survey showed.

According to a poll of members of the American Chambers of Commerce in Singapore, Malaysia, Indonesia, Thailand, the Philippines and Vietnam, four in five companies expect their business to expand in Asia in the next two years, with China continuing to be the biggest beneficiary.

Within Southeast Asia, 53 percent expect to expand their local work force compared with the one-in-10 that predict a reduction in staffing, according to the survey which was released by AmCham Singapore on Tuesday.

Overall, 71 percent of respondents said they expect profits to grow this year against 5 percent who forecast a fall in earnings. Going into 2005, U.S. companies in the region are even more confident with 87 percent projecting a growth in profits.

"The message is optimism, optimism, optimism," AmCham Singapore Executive Director Nicholas de Boursac said at a briefing on the survey, referring to member companies' positive outlook on the global economy, the region and profits.

At the individual country level, U.S. companies based in Malaysia are the most optimistic, with 89 percent saying they expect the local economy to perform better or much better this year.

They are followed by their counterparts in Singapore with 86 percent, Vietnam (78 percent) and Thailand (61 percent).

Not a single respondent in Malaysia and Singapore expects the economy to worsen, while just 3 percent of the Vietnamese-based U.S. companies and 10 percent of those in Thailand are bearish about local business conditions.

In the case of Indonesia, 35 percent of respondents expect the local economy will be better this year compared with 6 percent who predict a deterioration in the business climate.

At other end of the scale, 43 percent of U.S. companies in the Philippines expect the local economy to worsen against the 19 percent that said conditions will get better or much better.

Even so, 38 percent of companies expect to increase their Philippine work force against 22 percent that indicated they will likely to reduce current staffing levels.

Concerns cited about the Philippines and Indonesia included corruption and a lack of infrastructure and stable governments.

The AmChams' Asean Business Outlook Survey 2004 was carried out in April this year and received responses from 378 U.S. companies in the region, AmCham Singapore said.