Thailand Businesses Lead the World in Business Health
Bangkok, January 2023 — Grant Thornton’s latest International Business Report (IBR) shows that Thailand’s business health is at its highest point since 2017.
Grant Thornton released their International Business Report this month, showing that the business health of the Thai mid-market has been at its highest point since 2017. In the second half of 2022, Thailand’s business health improved by 3.8 percentage points over H1 2022, with the index reaching 8.8 – marking the highest point in five years and exceeding regional and global averages for the first time since 2017. In contrast, ASEAN business leaders are more cautious, while Asia Pacific and Global business leaders remain bearish.
Ian Pascoe, CEO and Managing Partner at Grant Thornton in Thailand, said this on the findings: “Business leaders are better prepared after having gone through 3 years of unprecedented economic turbulence as Thailand emerges from the pandemic. Our business survey indicates Thai businesses share a positive sentiment in their outlook for 2023 and are more positive about the effects of the external factors on their business.”
We can determine business health by combining the overall economic outlook with the sentiment on restrictions. The three major economic outlook indicators of general economic optimism, business conditions and investment intentions declined by 2.1 percentage points, 0.5pp, and 3.4pp respectively, in the second half of 2022. Improving sentiment on restrictions has significantly bolstered Thailand’s business health index. Business concern over demand constraints dropped by 9.6 percentage points from H1 2022, while worries over supply constraints fell by 7.4pp.
Despite ongoing challenges of inflation, high energy prices, and cultural phenomena such as the Great Resignation, businesses in Thailand remains more positive in their outlook as compared to the past 5 years, indicating that businesses have adapted and built resilience into their operations in preparation for 2023. In Thailand only 49% of survey respondents across the region listed economic uncertainty as a major constraint, an improvement of 18pp from the second half of 2021.
Businesses remain cautious when it comes to fiscal expenditures and investments. Just 36% of Thailand’s mid-market companies indicated that they would increase their headcount in 2023. The availability of skilled personnel is certainly not a limiting factor, at least currently. Only 26% of respondents in Thailand said talent scarcity was a significant issue, compared to 37% of respondents in ASEAN and 57% globally.
Despite encouraging signs of recovery, companies across Thailand are planning only modest investments in information technology (49%; down 12pp from H1 2022), plant and machinery (39%; down 5pp from H1 2022), and personnel (36%, as mentioned above; down 12pp from H1 2022).
Tanva Mahitivanichcha, Partner at Grant Thornton, commented, “these results indicate that business leaders in Thailand are planning to invest cautiously, at least in the near term. The challenges of inflation, energy prices, and interest rates remain. However, economic uncertainty dropping by 12pp since the first half of 2022 and nearly 20pp compared to the second half of 2022 indicates the nation’s resilience and ability to adapt to the post-covid environment. As Thailand continues to re-open its tourism sector, business health will continue trending upwards.”
Notes to editors:
The Grant Thornton International Business Report (IBR) is the world’s leading survey which provides vital insight into the health of the global mid-market. These results for H2 2022 reflect the views of nearly 5,000 mid-market companies across 30+ countries interviewed in November and December of this year. In Thailand, there were 102 respondents from companies with a headcount between 50-500.
About Grant Thornton in Thailand
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