High cost of living 'issue for US firms'

[reporter2]

http://www.straitstimes.com/archive/...firms-20120831

High cost of living 'issue for US firms'

Published on Aug 31, 2012

By Anita Gabriel, Senior Correspondent


THE rising cost of living, particularly housing, is the biggest source of dissatisfaction among employees of American firms in Singapore, according to a new survey.

Pricey office leases and scarcity of cheap labour also pose challenges but other aspects of business life here were seen as positive.

Mr Simon Kahn, the chairman of the American Chamber of Commerce (AmCham) in Singapore, said at a briefing on the survey findings yesterday: "My sense is that housing cost and the availability of high quality international schools could start to impact firms' business decisions to set up regional head offices here or elsewhere in the region."

The survey, which polled 356 top executives of US firms in seven Asean countries, was commissioned by AmCham and the US Chamber of Commerce.

Singapore had the largest representation in the survey, with 36 per cent of total respondents.

It also had the highest appeal among the seven nations in terms of infrastructure, security, stable government, tax structure and business incentives.

Corruption was the biggest source of dissatisfaction for US firms in Asean. However, Singapore scored the highest satisfaction ratings - 88 per cent - in this area compared with regional satisfaction of 36 per cent.

US companies were upbeat on their prospects here, with 70 per cent expecting profits this year to be better than last year's, and 85 per cent feel earnings next year will trump those of 2012.

About 60 per cent of the firms expect an increase in overall work force this year which is comparable with last year's survey results.

Overall, firms are "overwhelmingly optimistic" about the prospects in Asean. About 21 per cent plan to diversify their investments or business from China into Asean over the next two years.

Asean markets have also become more important to these firms in terms of worldwide revenue in the past two years.

Vietnam is the brightest spot for US firms, with 57 per cent citing it as the top location for expansion. Thailand, cited by 11 per cent, is a distant second.

"US businesses in Vietnam see it as a long-term play with strong opportunities in the near future," said Mr Kahn.

Myanmar is another promising sweet spot following Washington's decision to suspend sanctions on the country.

US firms cite Myanmar's infrastructure and commodity sectors as holding the most opportunity.

"The mood among US firms in terms of Myanmar's huge growth prospects is of cautious optimism," added Mr Kahn.

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SYDNEY: Mining tycoon Gina Rinehart has warned Australia if becoming too expensive for multinational companies who could hire workers for two dollars a day in Africa, sparking criticism from Canberra.

In a video address to the Sydney Mining Club, the world's richest woman said the nation must become more competitive as high costs force businesses offshore.

The iron ore magnate blamed the government's mining and carbon taxes, red tape and high wages for the economy's "sluggish" performance.

"Now, the evidence is unarguable -- that Australia is indeed becoming too expensive and too uncompetitive to do export-oriented business," she said.

"What was too-readily argued as the self-interested complaints of a greedy few is now becoming accepted as the truth, and more ominously is showing up in incontrovertible data."

Last week Rinehart, head of resources giant Hancock Prospecting, told Australians to "spend less time drinking or smoking and socialising, and more time working" and on Wednesday said the country should not become complacent.

"Furthermore, Africans want to work, and its workers are willing to work for less than $2 per day. Such statistics make me worry for this country's future," she added.

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There will always be someone willing to accept lower pay than you. Or if you think your pay is already very low, work for free - just to build up portfolio and track record.

[reporter2]

http://www.businesstimes.com.sg/arch...-here-20120831

Published August 31, 2012

Housing costs bother most US firms here

But they like the personal security and stable govt

By malminderjit singh


[SINGAPORE] The cost of housing here has been irritating most US businesses in Singapore although they are quite happy with personal security and a stable government here.

According to the latest survey of senior executives from US companies operating here, 77 per cent of respondents were dissatisfied with housing costs in Singapore, making it the factor they were most displeased with in doing business here.

This mirrors the findings of the survey from the previous year when the exact same proportion of American business executives placed housing costs as the factor they are most unhappy with in Singapore.

Labour and land costs were also factors that featured prominently on their dissatisfaction charts. A total of 48 and 40 per cent of the management of US companies here indicated that they were dissatisfied with office lease costs and the availability of low-cost labour in Singapore respectively, placing them as factors they were most unhappy with after housing costs. The same three concerns topped last year's list.

At the other end of the spectrum, US companies in Singapore feel much safer and have greater confidence in government stability and institutions here this year.

Personal security was the factor that most companies surveyed listed as them being most satisfied with, with 96 per cent of respondents indicating so. Last year, 84 per cent felt the same way.

Some 94 per cent were happy with the stable government and political system, against 89 per cent last year.

Overall, American companies here were satisfied with most of the factors of doing business in Singapore - with the laws and regulations, (lack of) corruption, tax structure, the movement of goods in and out of the country, and the availability of trained personnel all performing well in the survey.

Specifically, respondents were more satisfied with the tax structure, with 83 per cent indicating a positive response versus 74 per cent in 2011.

Conducted by the American Chamber of Commerce (AmCham) in Singapore and the US Chamber of Commerce, the survey also indicated that US companies were optimistic about their business operations here for this year and next. As many as 70 per cent of the respondents believed that their profits would increase this year while an even higher 85 per cent felt that their profits would continue to increase next year as well.

However, only 8 per cent of US companies said this year that they are looking to expand their operations here, compared to 14 per cent last year.

Some 58 per cent of US companies expect to increase their workforce in 2012, a drop of 9 per cent from last year.

Even then, there is less reason for gloom as lesser US companies expect to decrease their workforce 2 per cent this year compared to 7 per cent last year.

This reflects that even though fewer companies are planning to increase their headcount this year, more of them expect to maintain their staff strength, so there is less reason to fear job cuts. The percentage of US companies that expect to maintain the size of their workforce is 39 per cent this year, up from 25 per cent last year.

This reflects a normalisation of hiring activity among American companies here to pre-2009 levels as the crisis forced businesses to cut back on hiring in 2009 but increase it significantly in 2010 and 2011 to meet increase in business activity from a lower base, explained Simon Kahn, chairman of AmCham Singapore.

Another area that US companies in Singapore raised concern about is the ability to find adequate space in international schools here, with 38 per cent of respondents in Singapore believing it will be a significant problem in the next 1-3 years.

Despite this, overall expatriate employee satisfaction among the respondents remains high with 97 per cent of them indicating so, 85 per cent of expatriates here wanting to extend their time in Singapore, and 75 per cent of US companies indicating they regularly receive requests for assignments in Singapore from their staff in other locations.