According to Grant Thornton’s most recent International Business Report (IBR), Thailand’s business health is at its best since 2017.
Grant Thornton issued its International Company Report this month, revealing that the Thai mid-business market’s health is at its best since 2017. Thailand’s company health rose by 3.8 percentage points in the second half of 2022, with the index hitting 8.8 – the highest level in five years and topping regional and worldwide averages for the first time since 2017. In contrast, ASEAN business executives are more cautious, while Asia Pacific and global business leaders remain pessimistic.
On the findings, Ian Pascoe, CEO and Managing Partner of Grant Thornton Thailand, stated: “After three years of unparalleled economic upheaval as Thailand recovers from the epidemic, business leaders are better prepared. According to our business study, Thai enterprises have a bright view for 2023 and are more optimistic about the influence of external events on their business.”
We may assess business health by integrating the general economic outlook with sentiment toward regulations. In the second half of 2022, the three primary economic outlook indexes of general economic optimism, business conditions, and investment intentions all fell by 2.1 percentage points, 0.5 percentage point, and 3.4 percentage point, respectively. Improving opinion about limitations has greatly boosted Thailand’s business health index. Concerns about supply bottlenecks have decreased by 7.4 percentage points since H1 2022.
Despite ongoing challenges such as inflation, high energy prices, and cultural phenomena such as the Great Resignation, businesses in Thailand remain more optimistic in their outlook than in the previous five years, indicating that businesses have adapted and built resilience into their operations in preparation for 2023. In Thailand, just 49% of survey respondents across the area cited economic uncertainty as a key limitation, an increase of 18 percentage points from the second half of 2021.
Businesses continue to be cautious when it comes to fiscal expenditures and investments. Only 36% of Thailand’s mid-market enterprises said they will hire more people in 2023. At the moment, the availability of skilled individuals is not a constraint. Only 26% of Thai respondents believed skill shortage was a serious concern, compared to 37% in ASEAN and 57% internationally.
Despite positive signs of recovery, enterprises across Thailand are anticipating relatively moderate expenditures in information technology (49%; down 12pp from H1 2022), plant and machinery (39%; down 5pp from H1 2022), and manpower (36%, as indicated above; down 12pp from H1 2022).
Tanva Mahitivanichcha, Partner at Grant Thornton, stated, “These findings suggest that Thai business leaders want to spend prudently, at least in the short term. The difficulties of inflation, oil prices, and interest rates continue. However, economic uncertainty has decreased by 12 percentage points since the first half of 2022 and by roughly 20 percentage points since the second half of 2022, indicating the nation’s resilience and capacity to adjust to the post-covid environment. Thailand’s business health will improve when the country’s tourist industry reopens.”