THAILAND REPORT. Compiled by: The American Chamber of Commerce (AmCham) in Singapore 1 Scotts Road #23-03/04/05 Shaw Centre Singapore AND

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1 THAILAND REPORT Compiled by: The American Chamber of Commerce (AmCham) in Singapore 1 Scotts Road #23-03/04/05 Shaw Centre Singapore AND The United States Chamber of Commerce 1615 H St NW Washington DC

2 Copyright Standards This document contains proprietary research, copyrighted materials, and literary property of the American Chamber of Commerce in Singapore, the U.S. Chamber of Commerce, and AmCham Thailand. It is for the guidance of your company only, and is not to be copied, quoted, published, or divulged to others outside of your organization without the permission of the American Chamber of Commerce in Singapore, the U.S. Chamber of Commerce, and AmCham Thailand. This document is of great value to the American Chamber of Commerce in Singapore, the U.S. Chamber of Commerce, and AmCham Thailand. Accordingly, international and domestic laws and penalties guaranteeing patent, copyright, trademark, and trade secret protection secure the ideas, concepts, and recommendations related within this document. No changes may be made to this document without the permission of the American Chamber of Commerce in Singapore, the U.S. Chamber of Commerce, and AmCham Thailand. 2

3 TABLE OF CONTENTS 1. Introduction 4 Research Background & Objectives 4 Survey Methodology 4 Brief Outline of Results 5 2. Business Outlook 6 Current Business Climate 6 Importance of ASEAN Markets in Global Business 6 Trade and Investment in ASEAN 8 Business Direction and Movement in ASEAN 10 ASEAN Integration 11 ASEAN Free Trade Agreements 12 Profit Outlook 13 Workforce Expansion 13 Expatriate Satisfaction Factors Impacting Business in Thailand 15 Local Business Environment Factors 15 Major Strengths 15 Major Concerns 15 Other Local Business Environment Factors Conclusion 17 Appendices 18 (A) Sample Profile 18 Table A-1: Workforce and Turnover Table A-2: ASEAN Turnover Table A-3: Primary Responsibility (B) Local Factors Impacting Business 20 Table B-1: Satisfaction with Factors Table B-2: Satisfaction with Local Government (C) Expansion in ASEAN over the Next Two Years 21 Table C-1: Top 3 Reasons for ASEAN Expansion Table C-2: Top Reasons for ASEAN Importance over Next Two Years 3

4 1. INTRODUCTION Research Background & Objectives The American Chamber of Commerce in Singapore (AmCham Singapore) and the United States Chamber of Commerce, in cooperation with other AmChams in the ASEAN region, conducted a study among U.S. companies based in seven Southeast Asian countries: Cambodia, Indonesia, Malaysia, Singapore, the Philippines, Thailand, and Vietnam. This study is now in its 11 th year. The purpose of the study is to understand members outlook on business growth in Southeast Asia and their perceptions about a series of local factors. The members surveyed were senior executives, working with a company held by or with an American majority interest. For the first time in 2012, multiple senior executives from each company were surveyed. AmCham Singapore and the U.S. Chamber of Commerce developed a survey design using a web-based instrument. This report presents the feedback received from executives of U.S. companies in THAILAND. Survey Methodology Survey Scope: Senior Executives of U.S. Companies based in Thailand Sample Size: A list of 238 AmCham members with contacts was provided by AmCham Thailand. Response rate was about 19% (45) at the end of the data collection period. Data Collection Method: Web-based, self-administered survey. No enforcement on participation. Data Collection Period: June 15, 2012 to July 3, 2012 Note 1: Percentages may not add up to 100% due to respondents choosing I don t know or Not applicable. Note 2: For the first time in 2012, multiple senior members from each U.S. company were asked to complete the survey. Sample Profile (See Appendix A) The majority of respondents (59%) are responsible for multiple countries. The percentages of respondent member companies in the services sector and manufacturing sector are 45% and 34%, respectively. 36% of respondents had fewer than 50 employees in the regions, and an another 36% had a workforce between 50 and 500 employees in the region. The largest portion of respondents (55%) had a turnover of between $1 million and $50 million in Thailand in Turnover in Thailand accounted for less than 5% of global turnover for 75% of respondents and between 5% and 25% of ASEAN turnover for 30% of respondents. Other ASEAN countries with significant turnover for Thailand respondents are Singapore (33%), the Philippines (12%), and Indonesia (12%). 4

5 BRIEF OUTLINE OF RESULTS BUSINESS OUTLOOK Figure 2: Economic Outlook for Investment Opportunities in ASEAN ASEAN Economic Outlook: 85% of respondents indicated a positive or very positive outlook for the ASEAN region as an investment opportunity for their companies. Current Business Climate: Respondents facing significant financing constraints decreased from 21% in 2011 to 16% in Those facing higher costs of borrowing decreased from 34% in 2011 to 11% in Importance of ASEAN Markets in Global Business: 67% of respondents report that ASEAN markets have increased in importance to their companies in the past two years. A majority of respondents (64%) expect ASEAN importance to increase in the next two years. Business Direction and Movement in ASEAN: 65% of respondents plan to expand in ASEAN Figure 3: Location of Expansion in ASEAN Profit Outlook: 73% expect a profit increase in % expect a profit increase in Workforce Expansion: 60% expect a workforce increase in % expect an increase of 5 to 10%. Figure 1: Profit Outlook 2013 Major Strengths (%Satisfied) Major Concerns (% Dissatisfied) Personal security (69%) Corruption (64%) Office lease costs (56%) Stable government and political system (60%) Sentiment towards the U.S. (56%) Laws and regulations (56%) Housing costs (55%) Tax structure (47%) Infrastructure (51%) 5

6 2.1 Current Business Climate 2. BUSINESS OUTLOOK Table 2.1 Financing Constraints and Costs of Borrowing Is your company facing significant financing constraints? Yes 48% 73% 21% 16% No 52% 27% 79% 84% Is your company facing higher costs of borrowing? Yes 26% 26% 34% 11% No 74% 74% 66% 89% The percentages of respondents facing significant financing constraints and higher costs of borrowing are both at all-time lows for the survey. The percentage of businesses facing significant financing constrains continues to decrease from 2010 s high figure of 73%. In 2012, only 16% of respondents reported that they are facing significant financing constraints. Only 11% of respondents reported higher costs of borrowing in 2012, a major improvement from 2011 s figure of 34%. 2.2 Importance of ASEAN Markets in Global Business Table Importance of ASEAN over past two years Have ASEAN markets become more important or less important, in terms of worldwide revenue, to your company in the past two years? More Important 59% 59% 66% 67% Remained the Same 28% 32% 25% 24% Less Important 10% 5% 5% 9% ASEAN markets continue to grow in importance to respondents in Thailand, with 67% of respondents reporting that ASEAN markets have become more important in terms of worldwide revenue to their company in the last two years. This is consistent with last year s figure. 9% of respondents believe ASEAN markets have become less important, an increase from 5% in Table Importance of ASEAN over next two years Does your company feel that ASEAN markets will be more important, less important, or have the same importance for your company s worldwide revenues in the next two years? More Important 53% 67% 60% 71% 82% 64% Remain the Same 37% 32% 36% 20% 14% 33% Less Important 9% 1% 3% 4% 1% 2% In contrast, there was a significant decrease in respondents who believe that ASEAN markets will be more important in the next two years (from 82% in 2011 to 64% in 2012). However, only 2% of respondents believe that ASEAN markets will be less important in the next two years. 6

7 Table Reasons why ASEAN markets will be more important in worldwide operations and revenues in the next two years Economic Recovery 84% 86% 85% 3% Improvement in Infrastructure 53% 53% 50% 0% Increased Availability of Trained Personnel 48% 34% 18% 3% Favorable Government Policies 16% 19% 14% 0% Limited Growth Opportunities in Other Regions 28% 19% 40% 24% Stable Political Conditions 11% 5% 18% 3% Change in Business Strategy 33% 51% 35% 45% Other 0% 14% 17% 21% *In 2012, respondents were still allowed to select 3 reasons, but data was tabulated to add up to 100%. Change in business strategy replaced economic recovery as the top reason for believing that ASEAN markets will be more important in worldwide operations and revenues in the next two years. Limited growth opportunities in other regions was also a top reason, cited by 24% of respondents. 7

8 2.3 Trade and Investment in ASEAN Figure Outlook on ASEAN as an investment opportunity Thinking about the ASEAN region, what is your outlook for the entire region as an investment opportunity for your company. Negative, 2% Neutral, 13% Very Positive, 47% Positive, 38% Figure Trade and investment in ASEAN over the past two years Level of trade and investment in the ASEAN region over the past two years Decreased, 2% Decreased Significantly, 2% Remained the Same, 22% Increased Significantly, 20% Increased, 49% The large majority of respondents (85%) have a positive or very positive outlook on the ASEAN region as an investment opportunity. Only 2% of respondents have a negative outlook. Over the past two years, 69% of respondents indicated that their company has increased or significantly increased their level of trade and investment in the ASEAN region. Only 4% have decreased or significantly decreased trade. 8

9 Figure Trade and investment in ASEAN over the next 5 years Do you expect your company's activity to increase or decrease in the ASEAN region over the next 5 years? Remain the Same, 7% Decrease, 4% Increase Significantly, 22% Increase, 67% Table Trade and investment percentage growth over next 5 years By about what percentage do you believe trade and investment will grow in the ASEAN region over the next 5 years? Percentage Growth 0-10% 11-20% 21-40% % Average Percentage Respondents 18% 30% 23% 30% 38% TOP THREE REASONS WHY YOUR COMPANY S TRADE AND INVESTMENT WILL INCREASE IN THE ASEAN REGION: Increasing Market Share (30%) Diversification of Customer Base (13%) Tied at 10%: Lack of growth in current market/countries, adequate laws and regulations to encourage foreign investment, weak competition in the market/countries. The large majority of respondents in Thailand (89%) expect trade and investment in the ASEAN region to increase or increase significantly over the next 5 years, continuing the reported growth from the past two years. 30% of respondents predicted the growth of trade and investment in ASEAN to be about 11-20% over the next 5 years, and an addition 30% predicted that the growth will be %. The average expected growth is 38%. Respondents indicated that the top reason for their company increasing trade and investment in ASEAN was increasing market share (30%). 9

10 2.4 Business Direction and Movement in ASEAN Table Expansion in Thailand 2012 In Thailand, does your company plan to expand or contract? Expand Significantly 7% Expand 58% Remain the Same 31% Contract 4% Contract Significantly 0% Table Reasons for expansion in Thailand Reasons why companies plan for business expansion in Thailand Reasonable Production Costs 5% Availability of Raw Materials 5% Availability of Trained Personnel/Efficient Manpower 14% Increasing Market Share 33% Diversification of Customer Base 33% Lack of Growth in Current Market/Countries 10% The majority of respondents indicated that their companies plan to expand in Thailand (65%). Only 4% indicated that they plan to contract. The top three reasons for expansion in Thailand are increasing market share, diversification of customer base, and availability of trained personnel/efficient manpower. See Appendix C for more data. Table Location of ASEAN Expansion Into which specific ASEAN country or countries does your company plan to expand? Brunei 0% 0% 0% 0% Cambodia 9% 9% 9% 0% Indonesia 13% 4% 20% 5% Laos 4% 4% 1% 0% Malaysia 0% 9% 3% 0% Myanmar 0% 0% 0% 11% Philippines 4% 0% 1% 0% Singapore 4% 9% 6% 5% Thailand 36% 33% 29% 27% Vietnam 28% 21% 14% 51% Vietnam is the most popular site for expansion at 51%. This is a trend that is seen across the ASEAN region. Thailand is the second most popular site for ASEAN expansion at 27%, a slight decrease from 29% in Only 5% of respondents reported that they plan to expand into Indonesia, a significant decrease from the 20% who planned to do so in Respondents in Thailand cited Myanmar as a top site for expansion for the first time in the history of the survey. 10

11 Table Diversification from China into ASEAN Does your company plan to diversify some investments or business from China into ASEAN over the next two years? Yes 12% 24% No 61% 47% Not Sure 27% 29% In 2012, the percentage of respondents planning to diversify investments or business from China into ASEAN over the next two years doubled from A similar trend is seen across most of the ASEAN region. 2.5 ASEAN Integration Table Importance of ASEAN Integration Is ASEAN integration important to helping your company do business in the region? Yes 74% 75% 76% 56% No 26% 25% 21% 20% Note Sure The option not sure offered for the first time in % In 2011, respondents reported that ASEAN integration was important to their companies in a ratio of 7:2 yes to no. In 2012, this ratio is 3:1, revealing a slight decrease in the importance of ASEAN integration to companies in Thailand. Table ASEAN Regional Strategies ASEAN is seeking to develop the region as a single market and production base. Does your company have an ASEAN regional strategy based on these goals? Yes 42% No 49% Not Sure 9% Respondents in Thailand are fairly evenly split on whether or not their companies have ASEAN regional strategies based on these goals. In most ASEAN countries, the large majority of respondents answered No or Not Sure. Therefore, US companies in Thailand are more focused on aligning business strategies with ASEAN s goals. 11

12 2.6 ASEAN Free Trade Agreements (FTAs) Table Utilizing FTA s 80% 70% 60% 50% 40% 30% 20% 10% 0% Can your company utilize the provisions of the agreement to export goods or services from ASEAN to each specified country, import from those countries into ASEAN, or expand investment from ASEAN into each specified country? 31% 47% 22% 31% Australia and New Zealand 22% 27% 20% 36% 38% 36% China India Japan Korea Yes No Figure Importance of FTA s 120% How important is the agreement with each specified country to your company s investment plans in ASEAN? 100% 80% 60% 40% 50% 57% 38% 33% 40% 20% 0% 40% 31% 20% 13% 6% Australia and New Zealand 29% 38% 33% 14% 13% 17% China India Japan Korea Not at all Important Unimportant Neutral Important Extremely Important The ASEAN FTA with China can be utilized by the largest percentage of respondents in Thailand (47%). The FTA with Korea can be used by the smallest percentage of respondents (20%). The FTA with India was given the highest importance rating by those who can utilize it, with 86% of respondents reporting that it is either important or very important. In addition, the FTA with China is considered to be important or very important by 81% of respondents who can utilize it. 12

13 2.7 Profit Outlook Compared to the past year, do you expect your profits in ASEAN in the current and coming years to increase, decrease, or remain the same? Figure 2.7 ASEAN profit outlook Year of Survey Current Increase 60% 63% 65% 40% 63% 64% 73% Year Remain 24% 26% 25% 30% 23% 28% 22% Profit Expectation Coming Year Decrease 14% 9% 10% 29% 10% 3% 4% Increase 71% 75% 78% 70% 88% 81% 84% Remain 14% 16% 20% 14% 10% 13% 13% Decrease 9% 5% 2% 13% 0% 0% 2% Profit outlook remains positive, with the majority of respondents (73%) expecting profits to increase for the current year an all-time high for the survey. 84% are expecting profits to remain the same or increase in the coming year, which is consistent with data from the past two years. 2.8 Workforce Expansion Table Workforce Expansion in 2012 Do you expect your company s total number of employees to increase, decrease, or remain the same in 2012? Year Increase 61% 67% 50% 58% 32% 49% 62% 60% Same 35% 26% 36% 38% 44% 38% 31% 38% Decrease 4% 7% 15% 11% 23% 13% 2% 2% Table Percentage of Employee Increase By what percentage will the number of employees increase? Year of Survey Workplace 0 to less than 5% 9% 26% Expansion 5 to less than 44% 27% 38% 46% 42% 44% 47% 44% 10% 33% 33% 10 to less than 15% 24% 15% 28% 47% 43% 38% 45% 36% 23% 37% 15 to less than 20% 12% 15% 20 to less than 50% 22% 23% 12% 10% 11% 14% 20% 5% 12% 7% >50% 6% 3% 8% 6% 3% 6% 0% 10% 9% 4% For the first time in 2011, 0-10% was further separated into 0-5% and 5-10% % was separated into 10-15% and 15-20%. 13

14 Most respondents (60%) expect their number of employees to increase, about on par with last year (62%). Out of these respondents, 33% expect an increase of 5% to 10%, and 26% expect an increase of 0% to 5%. Workforce percentage increases are slightly lower than those in The percentage of respondents who expect the number of employees to decrease remained at 2% in 2011 and Expatriate Satisfaction Table 2.9 Expatriate Satisfaction Year of Survey Does your company regularly receive requests from employees based in other locations to work in Thailand? Yes 34% 44% 51% 38% No 66% 56% 49% 62% Are your expatriate employees generally satisfied with their assignments in Thailand? Yes 94% 99% 98% 96% No 6% 1% 2% 4% Do your expatriate employees attempt to extend their time in Thailand? Yes 84% 89% 83% 66% No 16% 11% 17% 34% Overall expatriate employee satisfaction remains high at 96%. Compared to 2011, fewer respondents indicated that they regularly receive requests from employees based in other locations to work in Thailand. There is a significant decrease in the percentage of respondents who had expatriate employees attempt to extend their time in Thailand, from 83% in 2011 to 66% in

15 3. FACTORS IMPACTING BUSINESS IN THAILAND Respondents were asked to rate their satisfaction with a series of local factors that could affect their business. The percentage of respondents who are satisfied or extremely satisfied with a given factor can be used to identify factors of strength. Conversely, the percentage of respondents dissatisfied or extremely dissatisfied with a particular factor can be used to identify areas held as concerns. 3.1 Local Business Environment Factors Major Strengths (Responded Satisfied or Extremely Satisfied at a considerable rate in the 2012 survey) Table 3.1.1: Time Comparison of satisfaction with major strengths. Factors Infrastructure 53% 56% 64% 59% 51% Office Lease Cost 51% 63% 60% 57% 56% Housing Cost 60% 60% 62% 58% 42% 55% 61% 58% 55% Personal Security 76% 76% 82% 65% 73% 70% 61% 58% 69% Sentiment Towards the U.S. 55% 55% 73% 67% 56% See Appendix B, Table B -1 for responses on all listed factors). *Empty boxes indicate areas that were neither strengths nor concerns for the year indicated. Responses bolded represent that year s response with the highest rate of satisfaction. Thailand did not gain or lose any strengths in Thailand is rated highest for personal security (69% satisfaction), sentiment towards the U.S. (56%), and office lease cost (56%).. Satisfaction levels generally decreased in major strengths from 2011 levels, with satisfaction down a few percentage points in all categories except personal security, which increased to 69% in 2012 after having fallen to 58% in Major Concerns (Responded Dissatisfied or Extremely Dissatisfied at a considerable rate) Table 3.1.2: Time Comparison of dissatisfaction with major concerns. Factors Corruption 62% 69% 67% 63% 66% 69% 66% 61% 64% Tax Structure 47% Stable Government & Political System 31% 57% 66% 74% 77% 59% 60% Laws and Regulations 40% 50% 53% 51% 43% 56% (See Appendix B, Table B-1 for responses on all listed factors). *Empty boxes indicate areas that are neither strengths nor concerns. Responses bolded represent that year s response with the highest rate of dissatisfaction. There is high dissatisfaction with corruption (64%), stable government & political system (60%), and laws and regulations (56%). In 2011, local protectionism reached a high of 50%. In 2012, local protectionism had a dissatisfaction rate of only 33%. Corruption remains the most significant concern for the second year in a row, increasing to 64% in Dissatisfaction with laws and regulations increased significantly from 43% in 2011, to 56% in

16 3.2 Other Local Business Environment Factors Government Institutions Respondents in Thailand overall have neutral attitudes towards local government institutions. Immigration received the highest satisfaction ratings (40%). Customs received the highest dissatisfaction ratings (42%). See Appendix B, Table B-2 for more details. Importing Goods Table Importing Goods into Thailand Is Importing goods into Thailand a significant problem for your company? Yes 27% No 73% 73% of respondents do not find importing goods into Thailand to be a significant problem for their companies. 16

17 4. CONCLUSION Positive outlook, better conditions Respondents from Thailand continue to hold an optimistic outlook on investment opportunities in ASEAN. Only 16% of respondents are facing significant financing constraints in 2012, an improvement from Nearly nine out of ten respondents do not face higher costs of borrowing. This data indicates the lowest levels of concern for these issues in four years. 73% of those surveyed in Thailand anticipate a profit increase in 2012, and an even greater percentage expects increased profits in Consequently, 60% plan on expanding their workforce in 2012, with the majority planning to increase by up to 10%. Steady importance of ASEAN integration ASEAN markets are increasing in importance to the respondents based in Thailand, due to changes in business strategy and limited opportunities in other areas. 67% of respondents state that over the past two years ASEAN markets have increased in importance to their business, and a similar percentage expects this trend to continue in the coming two years. The top reasons cited by the executives surveyed are increasing market share, diversification of the customer base, and availability of efficient manpower. Roughly two thirds of respondents plan to expand within ASEAN and the majority of those are looking to expand in either Vietnam or Thailand. Continued ASEAN integration is highly valued by companies in Thailand, and the most important free trade agreements to the Thailand respondents are those with China and India. Satisfaction remains high, yet decreases from previous years The business environment in Thailand has many strengths. Personal security has improved in recent years and respondents currently express a high level of satisfaction in that category. Sentiment towards the United States in Thailand is generally positive, and costs of housing and office space are considered affordable. However, there exist concerns about the stability of the government and political system of Thailand, and corruption. Although businesses continue to expand in Thailand, and expatriates continue to be happy with their assignments, there is a significant decrease in both requests for new Thailand assignments and requests to extend assignments. 17

18 APPENDIX A: Sample Profile APPENDICES Table A-1: Workforce and Turnover Survey Year Scope of Responsibility Only one country 38% 37% 43% 55% 42% 42% 52% 51% 47% 41% Multiple countries 62% 63% 57% 45% 58% 58% 48% 49% 53% 59% Size of Current Workforce in Region Company s Past Year Turnover in Thailand (USD) Below 50 employees 22% 34% 42% 29% 24% 24% 33% 28% 32% 36% 50 to <500 employees 53% 36% 37% 45% 48% 45% 40% 42% 48% 36% 500 to <1000 employees 7% 22% 5% 14% 17% 11% 12% 11% 8% 9% 1000 to <1500 employees 2% 2% 3% 3% 1% 4% 4% 5% 3% 2% 1500 to <2000 employees 7% 0% 3% 0% 0% 0% 1% 1% 0% 2% 2000 employees or above 9% 6% 10% 9% 9% 15% 10% 13% 9% 16% Below $1 million 14% 11% 20% 14% 14% 13% 17% 23% 17% 11% $1 to <$50 million 45% 47% 47% 41% 39% 43% 39% 40% 48% 55% $50 to <$100 million 20% 23% 9% 22% 18% 12% 9% 10% 8% 5% $100 to <$500 million 14% 11% 16% 10% 18% 19% 23% 16% 15% 18% $500 to <$1 billion 2% 6% 4% 7% 3% 1% 2% 4% 0% 2% $1 billion or above 5% 2% 4% 3% 5% 7% 8% 5% 9% 7% Past Year s Turnover As Percentage of Company s Global Turnover Below 5% 58% 64% 59% 57% 56% 58% 52% 75% 5 to <25% 11% 11% 20% 10% 16% 16% 18% 11% 25 to <50% 11% 4% 7% 13% 7% 9% 7% 0% 50 to <75% 20% 2% 1% 3% 5% 4% 6% 5% 75 to <100% 7% 4% 8% 6% 4% 4% 2% 100% 13% 9% 10% 11% 10% 13% 7% Past Year s Turnover as Percentage of Company s Total ASEAN Turnover ASEAN Country That Holds the Next Largest Turnover for Company Table A-2:ASEAN Turnover Below 5% 16% 17% 17% 27% 5 to less than 25% 30% 30% 31% 30% 25 to less than 50% 25% 19% 15% 14% 50 to less than 75% 8% 8% 10% 16% 75 to less than 100% 3% 12% 12% 5% 100% 17% 15% 15% 9% Vietnam 14% 9% 10% 7% Cambodia 0% 1% 1% 0% Indonesia 9% 12% 15% 12% Laos 1% 1% 1% 0% Malaysia 12% 13% 10% 10% Thailand 33% 22% 27% 10% Philippines 8% 15% 13% 12% Singapore 23% 25% 22% 33% Brunei 0% Myanmar 0% 18

19 Table A-3: Primary Responsibility Primary Activity Services Accounting 0% 0% 0% 0% Architecture and Engineering Services 2% 4% 3% 7% Banking 1% 2% 2% 0% Consulting 7% 8% 14% 7% Education 3% 1% 3% 2% Healthcare 1% 2% 1% 4% HR Services 2% 4% 2% 0% Insurance Brokers 1% 1% 0% 0% Legal 2% 1% 0% 4% Marketing & Communications Services 2% 4% 0% 0% Other Financial Services 2% 1% 5% 4% Software, IT, Telecommunications Services 5% 6% 6% 4% Transportation & Logistics 8% 7% 8% 7% Wholesale & Retail 5% 6% 5% 2% Business Process Outsourcing/ Shares 0% 0% 0% 1% Services Other 3% 3% 3% 4% Total Services 44% 52% 52% 45% Manufacturing Consumer Goods 12% 6% 5% 13% Electronics 8% 7% 3% 0% Food & Food Products 3% 6% 7% 4% Oil & Petrochemical 3% 1% 1% 4% Pharmaceuticals/Medical 2% 2% 3% 4% Machinery & Equipment 3% 5% 1% 0% Other 7% 6% 9% 9% Total Manufacturing 38% 33% 29% 34% Other 15% 14% 18% 18% 19

20 APPENDIX B: Local Factors Impacting Business Table B-1: Satisfaction with factors Total Extremely Extremely Total Satisfied Neutral Dissatisfied Satisfied Satisfied Dissatisfied Dissatisfied Infrastructure 51% 2% 49% 33% 13% 2% 16% Availability of raw materials 38% 9% 29% 22% 4% 7% 11% Availability of low cost labor 33% 7% 27% 33% 20% 4% 24% Availability of trained personnel 38% 9% 29% 18% 33% 11% 44% Office lease costs 56% 4% 51% 33% 4% 2% 7% Housing costs 55% 11% 40% 29% 18% 0% 18% Laws & regulations 20% 0% 20% 24% 47% 9% 56% Corruption 4% 0% 4% 29% 44% 20% 64% Local protectionism 29% 2% 27% 33% 16% 18% 33% Tax structure 24% 2% 22% 29% 40% 7% 47% Personal security 69% 16% 53% 24% 7% 0% 7% Stable government and political system 4% 0% 4% 36% 38% 22% 60% New business incentives by 18% 0% 18% 47% 20% 7% 27% government Sentiment towards the U.S. 56% 16% 40% 33% 7% 2% 9% Free movement of goods within the 42% 4% 38% 31% 9% 4% 13% region Ease of moving products through customs 36% 4% 31% 22% 20% 11% 31% Table B-2: Satisfaction with local government institutions Total Satisfied Extremely Satisfied Satisfied Neutral Dissatisfied Extremely Dissatisfied Total Dissatisfied Agency to promote/develop investment 24% 2% 22% 40% 9% 9% 18% Customs 29% 0% 29% 24% 22% 20% 42% Immigration 40% 0% 40% 29% 22% 4% 27% Taxation/Revenue 22% 0% 22% 31% 38% 7% 44% Central Bank 27% 5% 23% 46% 2% 0% 2% Ministry of Finance 22% 0% 22% 53% 4% 2% 7% Percentages may not add to 100 because Not Applicable and Don t Know were possible responses. 20

21 APPENDIX C: Expansion in ASEAN over the Next Two Years Table C-1: Top 3 Reasons for ASEAN Expansion Year of Survey Reasons for Expansion Economic recovery 60% 58% 49% 52% 45% 0% Potential for business growth 60% 58% 89% 81% 95% 0% Increasing market share 70% 68% 61% 52% 44% 33% Reasonable production cost 42% 28% 31% 18% 20% 5% Diversity of customer base 30% 45% 33% 40% 33% 33% Lack of growth in current market/countries 15% 12% 11% 15% 15% 10% Availability of trained personnel/efficient manpower 15% 24% 7% 12% 9% 14% Availability of raw materials 13% 11% 3% 3% 3% 5% High level of personal security 2% 1% 0% 0% 0% 0% Low level of corruption 2% 0% 0% 0% 0% 0% Adequate laws and regulations to protect business 2% 3% 0% 0% 0% 0% Adequate laws and regulations to encourage foreign investment 0% 7% 0% 0% 5% 0% Stable government and political system 7% 0% 1% 3% 3% 0% Low level of local protectionism 3% 0% 0% 0% 1% 0% Weak competition in market/countries 18% 17% 9% 7% 12% 0% Other 17% 16% 4% 12% 4% 0% Empty boxes indicate that no comparative data is available for those years. Table C-2: Top Reasons for ASEAN Importance over Next Two Years Year of Survey Reason Economic recovery 68% 64% 84% 86% 85% 3% Limited growth opportunities in other regions 50% 61% 53% 53% 40% 24% Improvement in Infrastructure 63% 28% 46% 34% 50% 0% Increased availability of trained personnel 15% 20% 16% 19% 18% 3% Favorable government policies 15% 61% 28% 19% 14% 0% Stable political conditions 23% 11% 11% 5% 18% 3% Change in business strategy 34% 33% 51% 35% 45% Other 14% 17% 21% Empty boxes indicate that no comparative data is available for those years. In 2012, data was tabulated to add up to 100%. 21