84% of UK firms surveyed plan to increase investment in APAC over the next five years
New data from the 2023 Asia Investment Survey from leading global intelligence consultancy S-RM has found that 84% of UK firms surveyed plan to increase their investment in the APAC region over the next five years. The UK figure was broadly in line with figures for other markets, with 89% of global respondents agreeing that the amount their company invests in APAC will increase as a percentage of their total global investment, including a quarter (25%) who expect it to increase a lot.
S-RM’s report also looked at the impact of Covid-19 on investor attitudes. 51% of UK firms surveyed say that APAC is more important now to their company’s overall global investment or expansion strategy than before the pandemic. This is slightly below the figures for the US (60%), and German or French (57%) firms surveyed.
Regionality
When asked about where in the APAC region this investment would be focused over the next five years, over a quarter (27%) of global businesses polled list Southeast Asia – including Vietnam, Malaysia, Singapore, Philippines and Indonesia – largely due to these countries’ domestic policies to introduce incentives or subsidies in a sector of interest, which was the reason selected by 45% of respondents.
But for UK firms in particular, South Asia – including India, Pakistan and Bangladesh – is the most important investment region identified, with more than a third of UK businesses choosing to invest or expand into these markets (34%) in the future. This region has seen high levels of investment in recent years, and 42% of UK leaders surveyed point to multinationals and other investors increasing their market presence as being the primary driver behind their own investments in the region.
For those UK firms looking further east for investment opportunities, China and Hong Kong were top targets due to evidence of strong local economic growth (42%).
Martin Devenish MBE, board director and head of corporate intelligence at S-RM, comments: “Despite the clear disruption facing businesses in the UK and around the world, it seems that the overall attitude towards investment in the APAC region remains incredibly positive. A majority of businesses in every market polled identified the region as a major growth area, defying worries about the long-term impact of Covid and rising geopolitical tensions.
“While businesses continue to grapple with these major macro-risk considerations, investment in APAC countries looks set to remain an increasingly important part of their future planning. For now, though, there is no clear consensus on one specific destination for that investment and business leaders seem to have split their interest relatively evenly across the major regions.
“The next few years could be a crucial time for UK, US, and European organisations as they decide .where to place their bets”
| Question: Where does your company currently see the greatest investment/expansion opportunity over the next five years? | ||
| APAC region | % UK respondents | % global respondents |
| South Asia (India, Pakistan, Bangladesh) | 34% | 26% |
| Southeast Asia (Singapore, Vietnam, Malaysia, Philippines, Indonesia | 27% | 27% |
| China and Hong Kong | 12% | 20% |
| Australia & New Zealand | 13% | 13% |
| Japan & South Korea | 13% | 12% |
Investor concerns
The report also highlights some concerns about investing in the APAC region. 78% of global investors polled say that aging demographics would put off investors in some sectors in APAC, while 72% say that corporate governance standards could be a barrier to investment.
Kath Lau, associate director at S-RM, added: “While the overall sentiment of the business leaders we polled is extremely positive about APAC investment, some organisations clearly do have concerns about specific markets, particularly around governance requirements.”
Further detail on the full report can be accessed on the S-RM website, here: https://www.s-rminform.com/asia-investment-survey
