SINGAPORE: According to the UOB Business Outlook Study 2024 (SMEs & Large Enterprises), Malaysia has emerged as the prime destination for business expansion in the region, followed by Singapore, Thailand, and Indonesia.

“Around three in five businesses highlighted ASEAN as the top market which they want to expand to within the next three years. In contrast, only one in three companies said they wanted to enter Mainland China.

Within ASEAN, Malaysia is the most important country that businesses want to venture into, followed by SingaporeThailand, and Indonesia,” UOB said in a statement on Tuesday (April 23).

Amid last year’s economic challenges, including inflation and interest rates, rising operational and labour costs, as well as geopolitical tensions, businesses are showing resilience and remain upbeat, with a sizable 35 per cent of firms across ASEAN and Greater China characterizing the business environment at present as “very positive” and 42 per cent calling it “somewhat positive.”

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Importantly, 24 per cent expect business performance to “vastly improve” this year, while 55 per cent say it will “somewhat improve.” The most positive markets in the region are Indonesia (56 per cent) and Vietnam (47 per cent).

Singapore’s Business Outlook

In Singapore, 75 per cent of the companies polled characterized the present business environment as very positive (30 per cent) or somewhat positive (45 per cent).

The most positive sectors are Tech, Media, and Telecomm (90 per cent) and Industrials, Oil, and Gas (83 per cent). These two sectors also saw the most improvement over the past year.

Over 70 per cent of Singaporean businesses expect their performance to improve in 2024. Nevertheless, a large majority, or 8 in 10, noted that they have been affected by high inflation rates.

“In a bid to manage high inflation, companies are also looking to balance cost-cutting measures with productivity improvements in the next one to three years.

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To achieve that, businesses are focusing on various initiatives, including adopting digital solutions to automate processes (25 per cent), investing in employee training (25 per cent) and extending the company’s range of products or services (24 per cent),” the report says.

Additionally, more than 7 in 10 said they are interested in expanding their businesses overseas, with Tech, Media, Telecomm, Industrials, Oil and Gas, and Manufacturing and Engineering expressing the most interest.

The biggest reasons for expansion are improved profitability, revenue growth, and establishing a reputation as a global firm.

Singapore companies are most interested in expanding to Malaysia (60 per cent), Indonesia (50 per cent), and Thailand (43 per cent) within the region. /TISG

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