Business leaders across Asia Pacific remain confident that their companies’ revenues will grow over the next 12 months despite increasing trade frictions.
In its latest survey of 1189 business leaders across the 21 Asia-Pacific Economic Cooperation (APEC) economies, PwC found that 35% were very confident of revenue growth, down slightly from 37% a year ago, while a net 51% plan to increase investments over the next year.
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PwC carried out the survey in the lead up to the APEC CEO Summit which takes place this week in Port Moresby, the capital of Papua New Guinea.
Business leaders in the United States and Thailand were among the most confident, with 57% and 56% ‘very confident’ of revenue growth while respondents in China and Mexico - two of the largest trading partners with the US - showed below average confidence at 25% and 21%.
In comparison, 33% of respondents in Vietnam indicated that they are ‘very confident’ of their companies’ short-term growth prospects, with another 48% being ‘somewhat confident’. International trade is likely to continue being a source of growth for Vietnam-based firms: 40% expect an increase in revenue opportunities thanks to new bilateral trade agreements and 34% anticipate such opportunities to arise from new multilateral agreements.
In addition to being positive on revenue growth, a net 51% of business leaders in APEC are planning to raise levels of investment, up from 43% two years ago. The biggest winners across APEC for foreign investment will be Vietnam, China, the US, Australia and Thailand, with Vietnam holding the top position for the second consecutive year.
Dinh Thi Quynh Van, General Director of PwC Vietnam said: “With major trade deals like the CPTPP, EU-Vietnam FTA and ASEAN-Hong Kong FTA on the horizon, Vietnam has the potential to attract even more investment and generate new cross-border business opportunities. However, additional regulatory reforms, continued domestic investment and improvements in manufacturing and labour standards are needed to fully capture the benefits from these and other trade agreements.”
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According to PwC report, the market for employment is also looking positive with 56% of business leaders in APEC (also 56% in Vietnam) creating more jobs and only 9% (Vietnam: 14%) actively reducing headcount as a direct impact of technology on their workforce.
However, the right talent is not always readily available and business leaders are struggling to find the people that they need with the right skills and experience, PwC’s survey shows. The gap is felt acutely across science, technology, engineering and maths (STEM) skills with 65% of APEC business leaders (Vietnam: 76%) stating that their governments need to do more to train STEM professionals and only 14% (Vietnam: 4%) feeling their government is doing enough in this area.
APEC business leaders are also very well aware of the need to invest more in becoming digital. With the internet economy projected to reach over US$200 billion in Southeast Asia alone by 2025, the top two investment priorities for business leaders are digital customer interactions and digital skills for their workforce.
