Will Philippines and Indonesia lead Asian machinery demand in coming years?

The GDP growth of Philippines and Indonesia have been very positive, but Is there enough momentum to keep the wheels turning?

Will Philippines and Indonesia lead Asian machinery demand in coming years?

There is a good possibility that South-East Asian markets possibilities for machinery and industrial equipment manufacturers will move to direction of Philippines and Indonesia in coming years. As the GDP growth in both countries have been very strong past years, the manufacturing industry output has been steadily rising as well. For example, the demand of electricity will double in Indonesia, as only 60% of the population is connected to national grid. Thus, the electricity requirement of manufacturing industries will definitely fuel the demand of all equipment related to electricity generation and distribution. Investments in industrial manufacturing equipment have risen on the average 8% annually during the last 10 years.

The increase is remarkable, given the fact that the mining industry has slowed down significantly since 2013. The contributing factors being the government placed export ban and slowing demand from China. Indonesia is rapidly strengthening its democracy and recovering economically from a long period of hardship and uncertainty. The outlook of the country looks strong and optimistic, which has been one of the big economic and political success stories in the past years.

As to Philippines, the country has passed under radar screen of many western investors. The increase in industrial output has been remarkably robust 7.7%. Also based on our own experience with our clients, the demand and availability of finance are supporting the strengthening economy and evolving economic activities in the country.
It seems that the private sector in Philippines is not as linked to Public sector spending as in the rest of Asia. Thus, our outlook for the country is very positive in predictable future. According to ADB, the GDP growth of Philippines is forecast to be 6.5% annually for the next six years.

Both Indonesia and Philippines have many islands and regions, each having different approach to business and availability of “de facto” information. Due to geographical factors, the challenges in the sales channel development and gathering of in-depth market information are extensive.

NORDIC INDUSTRIES ASIA PACIFIC PTE LTD has implemented challenging market and sales channel development assignment for our clients in Asia Pacific since 2003.

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