Manufacturing Market in Southeast Asia’s Countries

Some investors hesitate to move to Southeast Asia countries. China was the most famous country in Asia that gained the investors’ attention. Moving to Southeast Asia countries is something else. Will the manufacturing market in Southeast Asia be as profitable as China’s manufacturing market?

For those investors, Southeast Asia countries lack a supply chain that is developed by China. Southeast Asia’s infrastructure is still developing. But actually, some countries in Southeast Asia are the right fields for those who want to expand to the eastern countries.

Manufacturing Market Opportunity in Vietnam

According to southeast asia market trends in the past years, the productivity growth in every measurable category in Vietnam has increased. Between 2010 and 2017, China’s GDP per hour worked grew about 7%. Vietnam is right under this country, its GDP grew about 5.8%.

There was a lot of optimism in Vietnam’s supply chain shifts. But the critics worried about moving to Vietnam from China since this country has overstuffed ports and also a diminutive workforce compared to China.

But now, Vietnam has become one of the main destinations for the investors to transit out of China. Long before the trade war between US and China, the labor intensive and low value work in some industries such as footwear and garments moved quietly over the border to Cambodia and Vietnam.

Manufacturing Market in Southeast Asia: Thailand

According to asian market research, thailand is another country with an amazing growth in regional productivity during the past ten years. The GDP per hour worked grew about 5.3% between 2010 and 2017. Among the other countries in Southeast Asia, Thailand is one stable country in the manufacturing market.

The TFP growth in Thailand between 2010 and 2017 is only 0.6%. This TFP percentage grew higher than the average growth of TFP from the other Southeast Asia’s countries. Most of the economic growth came from the increase in labor productivity.

About the infrastructure of Thailand, this country is well developed compared to the neighboring countries. Thailand also expects some slowdown in the overall growth while this country focuses on the upping per worker productivity. The labor costs increased locally and are going to keep rising.

Manufacturing Market Growth in Malaysia

Malaysia is one of the amazing countries in Southeast Asia, in terms of worker productivity. In 2017, the country’s GDP per worker reached USD 49,000. This is much higher than China’s GDP per worker which was just USD 21,000.

The other measurements such as the GDP growth per hour worked. This country was like the other countries, such as Hong Kong, Singapore, and the United States, 2.5% between 2010 and 2017. Malaysia’s productivity growth in TFP reached 0.7% in 2017.

In terms of productivity, this country has a similar situation to the previous country mentioned above, Thailand. Malaysia still has a low cost yet large labor force. But this country is also seeing a slowdown in some expansion and will need to increase the manufacturing sector’s mechanization.

–Researching the manufacturing market in Southeast Asia is a crucial thing to conduct before expanding your business to one of Southeast Asia’s countries. Learn about the best country to expand and you will be able to grow a better business in the eastern countries.

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