http://www.businesstimes.com.sg/sub/...39140,00.html?

Published August 27, 2010

Housing costs, school places temper optimism of US firms

American Chamber survey finds increased optimism, and also challenges

By TEH SHI NING


(SINGAPORE) Many more American companies here are now expecting profit and headcount growth, compared to a year ago.

But housing costs, office rentals and international school places have re-surfaced as business concerns in the findings of a survey by the American Chamber of Commerce in Singapore.

'There are great expectations for this year, and with the increased optimism, investments and inflow of employees, there are also challenges,' AmCham Singapore chairman Steve Okun said at a briefing to present the findings yesterday.

Senior executives from 328 American companies across the Asean region were polled online from May to June, in what is the ninth annual business outlook survey AmCham has conducted.

The 81 respondents based in Singapore had the most optimistic profit outlook in the region, with 73 per cent expecting profit growth by this year and 85 per cent by 2011.

More than 70 per cent of the US companies polled here also expect to grow their headcount this year, though just 21 per cent expect to hire more expatriates.

But some concerns have re-emerged along with the positive economic and business news.

More American businessmen are now dissatisfied with Singapore's housing costs - 78 per cent compared to 55 per cent a year back - as a huge majority expect these to rise.

'This is coupled with an expected appreciation in the Singapore dollar, which means American expatriates here are hit both on the currency and rising rentals fronts,' Mr Okun said. And although fewer (43 per cent) expressed concern over office lease costs, Mr Okun thinks it is likely to be a concern for US companies here in coming months.

More respondents now also expect a shortage of places at international schools in the next one to three years, and fewer (69 per cent, down from 79 per cent last year) feel that the government is taking active steps to raise supply.

This is a business concern, Mr Okun stressed. 72 per cent of companies said the lack of space at international schools affects their decision to hire American employees, up from just 30 per cent last year.

The report also showed that American companies here view Asean integration as vital to business in the region.

This is no surprise since more Singapore-based US firms had regional headquarters or functions, than those polled in the other Asean economies, Mr Okun said.

Of the Singapore-based respondents, 72 per cent also expect Asean markets to become more important to their companies' revenues in the next two years.

The top reasons for this were Asean's own growth prospects and limited growth opportunities in other regions.