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Tuesday, April 16, 2024

Standard Chartered cites 4 key Asean growth sectors

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STANDARD Chartered Bank has identified four key sectors in Southeast Asia that showcase a high growth potential with compound annual growth rates, which it projected to outpace the overall industry average over the next few years.

These sectors were construction and infrastructure, consumer products, pharmaceuticals and health care and digital and e-commerce.

In its study titled “Winning in ASEAN Strategies to drive resilient growth in the region,” it surveyed 480 senior business leaders in four key sectors with the highest growth rates.

“Propelled by shifting consumer behaviors, accelerated digital adoption and rapid urbanization, these four sectors present significant opportunities for both regional and foreign companies looking to expand in ASEAN,” the bank’s study said.

“The four key sectors that this report highlights present significant opportunities for both regional and international companies in ASEAN.

However, over the past few years, the region has experienced fundamental shifts and disruptions that are leading companies to revisit their growth and investment strategies,” it said.

It said, however, that while the overall outlook across the four sectors remains positive, businesses have to tackle and overcome a host of challenges and disruptions, in order to survive in a high inflationary environment and thrive in ASEAN.

With cost pressures from rapidly increasing food and energy prices coupled with a surge in consumption demand from post-pandemic economic reopening, inflation pressures are weighing heavily on ASEAN economies, it said.

“As highlighted in the Industry Leaders Survey commissioned by Standard Chartered, rising geopolitical turbulence, such as protectionist measures, implications of US-China tensions and the ongoing Ukraine-Russia conflict, is one of the biggest challenges faced by business leaders across the world and in ASEAN as well,” it said.

“Furthermore, the impact of the health crisis, amplified in emerging ASEAN economies due to unequal access to healthcare resources and uncertainties in policy interventions, are imposing severe commercial and operational challenges for businesses in the region,” it said.

In addition, the bank’s survey showed sector-specific nuances, where other concerns related to cybersecurity, climate change and infrastructure gaps have been highlighted as potentially having an impact on future operations in ASEAN, over the next two to three years.

Overall, ASEAN’s pace of recovery is being driven by underlying shifts, such as growing consumer demand, increasing organizational capabilities and greater technology adoption, it said.

Trade agreements, such as the Regional Comprehensive Economic Partnership (RCEP), are expected to further accelerate growth across the region, with a majority of the surveyed business leaders looking to raise their investments into the region, as a result of RCEP, the study said.

Image credits: Pavlo Syvak | Dreamstime.com

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