Listen to what Asia Pacific businesses are saying about the business environment now


Businesses share their sentiments about the current business environment and where they think it is going.




The global economy appears to be bleak.

But there is hope in Asia Pacific. The ASEAN Economic Community (AEC) comes into effect at the end of 2015 and ASEAN is drawing much attention. Out of the ten countries in the AEC, Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam make up 96% of the regional block's GDP. Here is how these six countries are expected to perform according to Dun & Bradstreet's Business Optimism Index (BOI) report for Q3 2015.


Indonesia - Government shifts gear to steer economy


The rupiah is weakening. There is a slowdown in fiscal spending and exports. Commodity prices have seen better days. The silver lining is that the transportation, finance, and services sectors seem optimistic. The government is relying on domestic consumption and investment to stimulate the economy. Fiscal incentives are being introduced. For example, several items will be exempt from luxury goods sales tax, and the government will be revising non-taxable income and the loan-to-value ratio. Bank Indonesia has projected lower growth at 5.0%-5.4%, down from its previous forecast of 5.4%-5.8%.


Malaysia - Confidence worsens and hits a new depth


In what seems like an almost perfect storm in recent days, Malaysia is experiencing oil price woes, a weak ringgit, external debt, political instability and natural disasters. The D&B report reveals that Malaysia is seeing unprecedented lows in business confidence. Most sectors are seeing a decline in optimism. But transportation, finance and construction remain relatively optimistic. The mining and wholesale sector will not see a smooth ride moving into the second half of the year. Exports will also suffer from a general slow recovery of the global economy. The report also shows an overall increase in selling price across the board. But this is a direct effect of the recently implemented goods and services tax (GST). As part of the 11th Malaysia Plan, the labour market and public infrastructure are still active. D&B expects growth to decelerate further in the coming quarter as domestic consumption slows down with GST. But D&B maintains its GDP growth forecast of 4.8% for the year of 2015.


Philippines - Slight deceleration before take-off again


Business confidence will dip before regaining momentum this year. But Philippines is set to be the fastest growing economy for 2015 in Asia. This should remain unchanged as private demand is still going strong. Public spending and credit expansion are positive. The agriculture, finance and services sectors are optimistic. The mining sector is seeing a decline, but it is common across the six ASEAN countries. A risk exposure to the slowdown in China will affect exports. However, D&B still forecasts a 6.5% growth for Philippines in 2015.


Singapore - Upbeat sentiment is firing on all cylinders


The economic powerhouse of ASEAN continues to show business confidence entering the second half of 2015. Growth continues to be optimistic with the services sector leading the economic activity. Services, alongside Construction, Finance, and Manufacturing are optimistic while Mining is on a downtrend. The current deflationary environment is temporary, but China's slowdown poses a risk to exports. The short-term outlook is that Singapore is well-positioned and expected to grow 2-4%.


Thailand - Silver lining on horizon despite exports dip


The global recovery is not helping Thailand's export-driven market. But it stands to benefit from a robust private investment environment due to the low interest rate climate. Finance and Construction sectors are riding high. Tourism, a major driving force, is back in full swing now that political stability has been restored. But Wholesale and Retail sectors, once popular, is not as optimistic. However, while the report shows that all six key indicators have decreased quarter-on-quarter, most have increased year-on-year and businesses are still optimistic on Sales, Selling Price, New Orders, and Employment. The market is expected to rebound in September with public sector expenditure as the main force behind it, alongside growing investment and tourism. The Bank of Thailand has revised its GDP growth for 2015 to 3.0% down from 3.8%.


Vietnam - Manufacturing revs up the growth engine


Vietnam takes the spotlight in ASEAN this quarter with business confidence soaring far above its counterparts. Its outlook on the six key indicators is mostly positive with the only downside being inventory levels. In fact, Vietnam is so positive about the second half of 2015 that its optimism index has risen sharply from 27% to 43%. Its positive outlook is led by the Construction and Manufacturing sectors, while Wholesale and Services sectors remain soft. The Trans-Pacific Partnership (TPP) and other Free Trade Agreements (FTA) will continue to provide a good support to its export market. With that, D&B forecasts a 6% growth for Vietnam.


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