Report: Confidence in Asia-Pacific Economy Growing
Los Angeles, CA – Confidence in the economic potential of the Asia-Pacific region continues to get stronger amongst CEOs there, says a new report issued by PricewaterhouseCoopers (PwC).
According to the New Vision for Asia Pacific report, forty-six percent of executives in the region now say they are “very confident” of growth in the next 12 months, up 10 points from 2012 and four points from last year, despite slowing growth in China.
The survey found that 67 percent of the 600 senior business executives surveyed plan to increase investment in the APEC region over the next 12 months. Their plans are spread over each of the 21 APEC member economies, with China, the U.S., Indonesia, Hong Kong, and Singapore the most popular destinations for investment.
More than half of respondents said they are either building or expanding facilities in APEC economies and increase their organizations’ global headcount by at least 5 percent annually over the next 3-5 years.
A healthy, skilled workforce remains a priority, the report says, as 75 percent of respondents already have employee training/retraining programs and 17 percent stated they will implement one.
Supporting this confidence is a vision of an Asia Pacific region that is more connected, both physically and virtually, and an outlook for more balanced regional growth, the report says.
For example, nearly 60 percent of executives say they are now more willing to share insights and resources with business partners in order to speed product development and gain market access. In addition, more than 40 percent say their company will likely enter a business combination outside of their core industry.
“Asia Pacific today stands at a turning point as advancing technologies move beyond national boundaries and create new demands and even new industries,” said Dennis Nally, chairman of PricewaterhouseCoopers International Ltd.
Chief executives, he says, “see the need to be bold in breaking down the barriers to growth. They want to finalize the Trans-Pacific Partnership, address intellectual property issues and encourage regulatory harmony in the region.”
Domestic competition, the survey found, is intensifying, while compliance and tax uncertainties continue. Twenty percent of respondents say they are less confident in their ability to increase profit margins on their domestic operations than they were a year ago. Fifteen percent said their confidence in forecasting compliance and tax liabilities declined over the year.
The survey found that data-driven changes are having an impact in the region; 57 percent of executives say they are more confident of their ability to respond to changes in the marketplace, and half say they are more skilful at forecasting demand. These executives are more likely to be “very confident” of growth than their peers.
PwC released the new report at a meeting of the Asia Pacific Economic Cooperation (APEC) in Beijing.
The New Vision for Asia Pacific report also found that many APEC businesses are not ready to fully participate in the digital economy.
Less than half of Asia Pacific executives are confident they are profiting from their investments in social networks with only between 12 percent and 22 percent of APEC businesses “very confident” across a range of social network capabilities.