Southeast Asia seen as growth hub for EU firms

For the third straight year, Southeast Asia is still seen as a source of growth momentum for European businesses. This is according to a latest poll by the European Union-Asean (Association of Southeast Asian Nations) Business Council (EU-ABC).

The Philippines, however, will have to raise its play as it lags behind neighboring markets.

Based on the European Union-Asean Business Sentiment Survey, Southeast Asia continues to show “promising” growth prospects for European firms despite growing global trade concerns, affecting economies.

Based on 474 responses from European business leaders, 73 percent said that Southeast Asia has become “more important” in boosting their revenues for the past two years.

Also, 71 percent showed optimism that trade activities in the region would become more robust in the next five years.

The top favored markets include Vietnam, Indonesia, Malaysia and Thailand.

Further, 66 percent of the executives have signified interest in expanding in Vietnam. Meanwhile, 60 percent of the participants have eyes on Indonesia and 57 percent are considering both Malaysia and Thailand.

Of the respondents, 51 percent also plan to scale up their operations in Singapore, known to be one of the strongest economies in Asia.

Only 40 percent of the European representatives, meanwhile, are targeting to widen their reach in the Philippines.

However, the pace of growth may be hampered by “slow progress” on the region’s integration and “insufficient” collaboration from European institutions.

“Asean continues to be viewed as the most promising region for growth, but at the same time, European businesses report frustration at the slow pace of regional integration,” said Chris Humphrey, executive director of the EU-ABC.

Some of the factors he cited that “limit” the market’s potential include nontariff measures and regulatory inconsistencies.

“Unless greater effort is made to address these barriers, the region risks falling short of its ambition to function as a truly single, integrated market,” Humphrey said.

“European companies remain committed to expanding in the region, but fully capitalising on Asean’s growth requires faster progress on reducing barriers and deepening integration,” he added.

Humphrey likewise urged European companies to strengthen their engagement with Asean counterparts.