German businesses in Malaysia and Singapore saw an overall improvement in the first quarter this year, faring better than Indonesia, Thailand and Vietnam, according to the Asean Business Climate Survey 2012.
Conducted by the German Chamber of Commerce and Industry of the five Asean countries, the survey showed that businesses in Malaysia and Singapore “saw an improvement in the overall situation of the company’s business when compared with the same time last year.”
The chamber said in a report of the survey findings that Indonesian respondents were optimistic on sales and production with 59.4 percent saying that the company’s overall situation at present was more than satisfactory.
Respondents from Indonesia, Thailand and Vietnam said overall business was about the same, except for Vietnam where a net 50 percent said that production was worse than last year.
On the whole, however, businesses are confident of an upward trend in sales and production with all five countries expect improvement within the next 12 months.
The survey noted that sales volumes were satisfactory for 54 percent of businesses and no major shifts were noted in the company businesses’ overall situation in the first quarter of 2012.
For Malaysia, the chamber highlighted several points gathered from the local respondents such as high data for a positive current financial situation of companies with 47.1 percent said the situation was good and 62.5 percent acknowledged improvements in comparison with previous year.
It also noted that Malaysian companies had employed more workers, 81.3 percent increase compared with the previous year, and investment had increased 37.5 percent compared with the previous year.
The findings found access to public contracts an important factor for German companies with 56.3 percent respondents agreeing with it.
“As Malaysia continues to strive towards achieving a high-income nation status by focusing on innovation-led growth, 82 percent of respondents in Malaysia saw an increase in the number of workforce and expect it to increase in the next 12 months,” it stated.
The survey also pointed to the high importance of inland and regional markets for German companies, especially for smaller economies like Malaysia and Singapore.
“Although the export beyond regional borders still proves to be a stronghold, products and services stay within the region. This proves to be business case for the bigger national economies Indonesia and Thailand,” the report said.
, adding that the importance of developments in Asean triumphed those in the European region.
Of the five countries, only Vietnam appeared to rely more on international markets than inland and regional ones.
Malaysian-German Chamber of Commerce and Industry executive director Alexander Stedtfeld said that “the Asean region is one of the most dynamic economic regions with significant growth potential.”
He added that the growth would be spurred further by the duty-free circulation of goods by 2015, to which German businesses were major contributors.
“Amongst the Asean countries, Malaysia is one of the most attractive business destinations, including a business-friendly environment, competitive cost structures, a well-skilled workforce as well as a base for regional activities.
“The Malaysia-EU Free Trade Agreement, which is currently under negotiation, will provide an additional push,” he said.
Most of the respondents for the survey came from the services sector, including the machinery, electrical equipment and engineering sector, food and health industry and from the chemical products sector.
Questions in the survey focused on the business confidence, growth intentions and investments within the countries in the past year and for the year ahead as well as views of the general economic outlook for 2012.