Only 19% of US firms plan to expand ops, despite positive outlook

PETALING JAYA: US firms operating in Malaysia appear to be less enthusiastic in expanding their operations within the country, despite displaying a positive profit outlook.
According to the US Chamber of Commerce and the American Chamber of Commerce’s 2018 Asean Business Outlook Survey, only 19% of the survey’s respondents said that they plan to expand within the country. Indonesia, Vietnam and Philippines evidenced more interest for expansion of business.
The survey, polled senior executives representing US companies in all 10 Asean countries. Of the 356 American Malaysian Chamber of Commerce (AMCHAM) members, 53 responded to the survey accounting for 15%.
Some 77% on the other hand said they expect positive profit growth this year while 17% said they expect their earnings to be flat, and a mere 4% expected a decrease.
As for volatility of the local currency, 64% said the ringgit had impacted them negatively, while 21% saw the currency situation as positive.
A good majority of these companies (32%) said they would take no action if their company is affected by the ringgit whereas 29% said they will pass the cost to customers.
“Respondents are generally neutral about government agencies in Malaysia. No agencies received a satisfaction rate of higher than 50% or a dissatisfaction rate of higher than 40,” the report said.
The surveyed companies had cited corruption as their single greatest concern in the region except in Brunei and Singapore. This was followed by concerns on laws and regulations that inhibit business expansion.
Besides that, respondents also found it difficult to find graduates equipped with communication and cross collaboration skills in Malaysia. While the difficulty rate for the whole of Asean stood at 41%, Malaysia on its own registered about 53%.
AMCHAM executive director Siobhan Das, said that Malaysia continues to be an important base for US companies and the two way trade relationship between the region and US is vital for maintaining geopolitical stability and promoting growth between them.
AMCHAM has been engaging with the government to help improve the business climate in Malaysia.