Trade and business uncertainty won't hold back investment for APEC
(Thomson Reuters ONE) -
APEC CEO Summit 2016: 17-19 November, Lima, Peru
* Over half of APEC business leaders plan to increase investment
* Short term revenue growth outlook flat
* One third of CEOs expect new sources of revenue from digital data on
connected devices
LIMA, Peru, Nov. 17, 2016 (GLOBE NEWSWIRE) -- Over half the businesses in the
Asia-Pacific Economic Co-operation's (APEC) 21 economies (53%) surveyed by PwC
this year plan to increase their investments over the next 12 months. This
is despite reporting fragile confidence in prospects for revenue growth over the
next year and disappointment with pace of progress on free trade in the region.
PwC surveyed over 1,100 business leaders in 21 APEC economies in the run up to
the annual APEC CEO Summit in Lima, Peru (17-19 November).
Long term, it is good news for APEC economies, with over two thirds (69%) of the
increased investment to stay within APEC economies. China, the US, Singapore and
Indonesia are set to attract investment from more CEOs. A regional
diversification strategy is also apparent. On average, APEC businesses PwC
surveyed invest in seven other economies. Last year, on average, they were
investors in six. Almost a third (31%) of businesses plan to focus investment
increases in economies outside of APEC.
Overall, just 28% of all APEC business leaders remain very confident about
revenue growth over the next 12 months. It's the second year in a row CEOs have
had a subdued outlook for revenue growth. Businesses leaders in APEC's youthful,
faster-growing economies have higher levels of confidence in near term revenue
growth than before. These include The Philippines (65% very confident in
revenue growth), and Viet Nam (50% very confident).
This year, while more CEOs reported seeing significant progress towards the goal
of free trade in the Asia Pacific than did two years ago (22% significant vs
15% in 2014), the majority (53%) in this year's survey continue to see progress
as slow.
At the same time, the competitive environment in APEC economies is changing.
More CEOs today see the leading company in their competitive set as either a
multinational based in emerging economies (18%) or a regional leader in APEC
economies (20%). This compares with 10% and 12%, respectively in 2014. The
biggest competitive threat remains multinationals from developed economies.
"A subdued level of confidence in the business outlook is hardly surprising
given geopolitical events this year. What's critical for the region is that
business leaders hold their nerve on investment and innovation.
"For the foreseeable future, APEC business leaders will have to balance the
short term economic outlook with investing for the long term. The wider
regulatory and tax environment are critical factors in business confidence and
investment. Standing still on regulatory conditions is not the way to be
competitive in a paradoxically cash-rich but slow-growth world," said Orlando
Marchesi, country senior partner, PwC Peru.
CEOs' outlook on the pace of GDP growth in China is mixed also. Almost half of
APEC CEOs believe China's GDP in the next three years will grow on average at or
below 5-6% a year. Despite this, CEOs are not ignoring the growth potential for
their business. Over the next three years business leaders want to build their
brand, expand inland and work in partnerships. These are the strategies most
common to business leaders, foreign and domestic, with investment in China.
Raymund Chao, PwC China chairman, comments:
"It's significant that APEC business leaders look beyond a slowdown to the long
term. China is a prime example. Its scale and skills means concerns about its
slower economic growth are not enough to put business leaders off investment and
expansion. China remains a powerhouse of potential for APEC businesses for new
products, and partnerships."
In a warning sign for the APEC economies' leaders, CEOs point to continued
uncertainty around policy-related costs. Only 14% of all respondents say they've
become 'more confident' that they're able to forecast compliance costs and tax
liabilities than they were at this time last year.
Respondents are more likely to rank the regulatory environment (transparent
rules, lack of corruption) as the factor that matters the most in cross border
investment decisions within the region. Moreover, over half (58%) expect the
regulatory environment to exert 'more influence' on their investment decisions
in APEC economies over the next 3-5 years. The findings suggest that business
investment is now more likely to flow to APEC economies with the right policy
environment and talent pools as well as dynamic growth prospects.
APEC businesses are also turning to wider strategies for revenue growth. CEOs
report that digital upgrades throughout the enterprise are helping
them target results in operational and cost efficiencies, improving
customers' experience and asset optimization.
Over the next three years, the findings suggest that real-time or near real-time
data collection in logistics, equipment, and point of sale devices will become
ubiquitous in the region.
One third of respondents expect new sources of revenue as a result of
integrating the role of connected devices in their businesses.
"APEC's manufacturing and resource rich economies have the potential to show how
data analytics can be used to inform business strategy, using information from
production, partners, logistics, customers, and the shop floor. The power
of digital data is not in how much of it you gather, but how you action the
information it gives you," added Orlando Marchesi.
Notes
1. PwC is the Knowledge Partner of the APEC CEO Summit 2016. For a full report,
go to www.pwc.com/apec
2. PwC interviewed 1,154 CEOs and industry leaders across the 21 APEC economies
during May to July 2016.
3. The level of those 'somewhat confident' in the outlook has risen (from 39%
in 2015 to 49% in 2016), at the expense of a falling level of those 'not
very confident' (from 27% to 17%) and not at all confident (from 5% to 3%).
4. Competition: 34% identify developed economy multinationals as their biggest
competitive threat. But concern has risen about the threat from
multinationals in emerging economies (from 10% to 18%), and regional leaders
in APEC economies (from 12% to 20%).
About PwC
At PwC, our purpose is to build trust in society and solve important problems.
We're a network of firms in 157 countries with more than 223,000 people who are
committed to delivering quality in assurance, advisory and tax services. Find
out more and tell us what matters to you by visiting us at www.pwc.com.
PwC refers to the PwC network and/or one or more of its member firms, each of
which is a separate legal entity. Please see www.pwc.com/structure for further
details.
© 2016 PwC. All rights reserved
Contact:
Mike Davies
Tel: +44 7803 9874136
E-mail: mike.davies(at)uk.pwc.com
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: PwC via GlobeNewswire
Unternehmensinformation / Kurzprofil:
Datum: 17.11.2016 - 16:00 Uhr
Sprache: Deutsch
News-ID 507897
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