Investors in the region, who enjoyed double-digit annualised returns in the 10 years to the end of 2013, have been disappointed by the paltry returns over the more recent decade (see chart below). One of the biggest reasons for the economic setback stems from the lack of formal job creation across industries.
The promise of the Asean region, home to more than 670 million people, has been underpinned by the growing middle classes. With a median age of 30, the Asean population contains the third largest workforce bloc (after India and China).
This cohort is expected to continue to earn more and spend more, thus boosting the local economy and creating a virtuous cycle of growth and consumption. But figures from the International Monetary Fund (IMF) show that income growth (as measured by GDP per capita) has stalled in recent years; and our company meetings suggest that consumer spending has been weak.
