Why this is important to Wisconsin businesses: Wisconsin boasts the highest concentration of experienced manufacturing workers in the U.S.
Southeast Asia is primed to be a hot spot for manufacturing over the next several years, a consultant report says.
The analysis by Boston Consulting Group (BCG) says conditions are right for manufacturing in the 10 countries that make up the Association of Southeast Asian Nations (ASEAN) to jump by as much as $600 billion a year by 2030, compared to 2020 levels, creating 140,000 jobs a year.
The report, released in 2021, says ASEAN already has well-established manufacturing clusters, and a new trade pact is expected to accelerate the flow of finished products and investment between Southeast Asia and trade partners such as China, Japan, South Korea, and Australia.
The ASEAN market is “one of the world’s most important growth markets,” BCG says, with a combined population of 660 million people—more than two-thirds of them of working age—and a gross domestic product of $3 trillion.
The report predicts that the number of middle-income and affluent households in countries such as Vietnam, Indonesia, and the Philippines will increase by about 5% a year through 2030, providing a growing market for consumer goods.
In addition, because of trade friction between the U.S. and China and supply chain concerns left over from the pandemic, some companies that have depended on Chinese manufacturers are looking to set up secondary production sites.
Potential growth areas for advanced manufacturing in Southeast Asia include:
• Electronics: The electronics industry accounts for around 20% to 50% of the total export value of most South Asian countries. Southeast Asia now produces much of the world’s consumer electronics, including televisions, computers, and smartphones. More than 80% of the world’s hard drives are produced there.
• Aerospace: The aerospace industry in ASEAN has seen significant growth in recent years, and there is increasing demand for new aircraft in the region, including electric and hybrid aircraft.
• Automotive: With low car ownership rates, the automotive industry in ASEAN is poised for growth in the decades to come. ASEAN ranks as the seventh-largest automotive manufacturing hub worldwide.
• Petrochemicals: The region is a leading manufacturing center for different products of the petrochemical industry. Another important trend is the gradual development of the production of bioplastics and biofuels, which complement traditional petrochemicals.
• Food and beverages: Southeast Asia is home to 8% of the global population, but it only has 3% of the world’s agricultural land, creating an urgent need to address food security. As food demand continues to increase, governments are looking at ways to bolster local production by improving efficiency and shortening supply chains.
• Medical: The region´s medical industry is developing rapidly, buoyed by an increasing prevalence of chronic ailments and significant investment in research and development.
The ASEAN countries are: Brunei, Burma, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand, and Vietnam. Together, they are the U.S.’s fourth-largest trading partner, according to the Office of the U.S. Trade Representative.
Wisconsin’s strong manufacturing sector could open doors for potential export opportunities.
