European firms upbeat on region’s prospects

Economy September 06, 2017 01:00


EUROPEAN businesses maintain a positive outlook on Southeast Asia and expect to see their profits increase in the region, according to the third annual EU-Asean Business Sentiment Survey.

More than 300 executives of European Union companies doing business around Southeast Asia were polled.

The report, released yesterday, noted that Thailand-EU trade is worth 33 billion euros (Bt1.3 trillion). 

It said Thailand ranks second in best availability of competitively priced labour, ease of recruiting labour from abroad, prevalence of business-friendly customs procedures, fiscal structures, and administrative costs for business and infrastructure. 

The second-place ranking represented an improvement since the 2016 survey.

Three-quarters of European businesses expect an increase in Southeast Asian profits for 2017 and almost three-quarters said the region has become more important in terms of global revenues over the last two years.

As a result, 94 per cent of European businesses plan to expand or maintain their current levels of operations and staffing in the region. Eighty-six per cent of them expect their level of trade investment in the region to increase over the next five years.

European businesses in the region are keen to see strengthened ties between the European Union and Asean. 

More than four-fifths believe the EU should pursue a free-trade agreement with Asean, a significant increase on the 66 per cent surveyed in 2016. More than half feel they are at a disadvantage in the region without such an agreement.

However, challenges for businesses remain, impeding Asean from reaching its maximum economic potential. Almost two-thirds of European businesses said non-tariff barriers are hampering supply-chain efficiency.

Based on the survey findings, the Business Council is calling for accelerated negotiations on a free-trade agreement and more frequent and regular interactions between EU and Asean governments and the private sector. 

It also urges further advances in economic integration within Asean.