For the third year, India tops the table as the country with the most optimism, with an optimism/pessimism balance of 93 per cent positive, while Taiwan is at the bottom this year with a balance of 19 per cent negative.

Business owners in Thailand are at the lower end of the positive optimism table regarding the outlook for the economy this year, with a figure of only 9 per cent positive. This compares with 64 per cent positive in Singapore and 36 per cent positive in Malaysia.

However, Thai business owners are more optimistic about revenue increases, with a balance of 55 per cent, compared with the Asian average of 58 per cent.

The survey found that factors impacting on business optimism in Thailand include political uncertainty, increasing oil prices and the crisis in tourism, while natural resources, growth in service industries, and export strength are positive factors helping to increase optimism.

Grant Thornton's International Business Owners Survey 2006 was conducted in the fourth quarter of last year, and covered 7,000 business owners in 30 countries across six continents.

In Thailand, a well-developed infrastructure, a free-enterprise economy, and strong investment are underpinning continuing economic progress, the survey said. The country has been one of East Asia's best performers in the past four years, with GDP growth averaging almost 6 per cent.

However, high oil prices, political issues and an increasingly restrictive monetary policy in response to rising inflation have squeezed incomes and consumer spending growth has eased from well over 6 per cent to 4.4 per cent,

restricting GDP growth.

Employment in Thailand is expected to continue growing, with a balance of 44 per cent of Thai businesses expecting employment levels to rise, well above the expectation for East Asia as a whole (35 per cent) and globally (also 35 per cent). However, the availability of skilled workers is seen as a major constraint on expansion by 49 per cent of Thai businesses, significantly higher than both regional and global averages.

Despite political tensions in the early months of 2006, economic activity has held up and, with exports benefiting from the buoyant global backdrop, economic growth is expected to pick up to almost 5 per cent this year and in 2007, the survey result said.

Thailand's export profile is one of the bright spots highlighted by the survey, but Thai business owners indicate that the main barriers to export growth are political instability (17 per cent) and financial constraints (17 per cent).

About 62 per cent of business owners in Thailand report that their stress levels have increased over the past year, higher than the global average of 57 per cent.

The survey result suggests that Thailand is in a poor position to capitalise on the China boom. Thai respondents show a strong negative response to trade with China, with 45 per cent saying China's growth has negatively impacted on their businesses and only 5 per cent claiming a positive impact.

At the same time, Thailand's Asean neighbours show an opposite reaction, with 33 per cent positive and only 17 per cent negative.

Ninety per cent of Thai small- and medium-size enterprises in the survey say they have no plans to export to China.

The survey also shows that the biggest concern regarding profit margin pressure for Thai business owners is rising fuel prices and the cost of raw materials, significantly higher than global or regional results.

An overwhelming 91 per cent of Thai respondents claim they will concentrate on cost-cutting measures, while only 48 per cent will opt for revenue increasing measures such as introducing new technology, systems or procedures.

The regional picture is a reverse of this profile, with more focusing on revenue-boosting activities. In Singapore, 77 per cent indicate plans to increase marketing and sales campaigns and 78 per cent of Malaysian respondents plan to introduce new technology, systems or procedures.

The survey points out that risk management is an increasingly important issue in modern business. But only half the Thai owners are formally managing risk and a massive 41 per cent say they have no formal risk management approach and no plan to implement one.

Thai business owners clearly indicate that business leadership skills are the most critical gaps in their organisations, including decision-making skills (96 per cent), financial management skills (92 per cent), and business planning skills (82 per cent). Other significant gaps include computer skills, project management, and English-language skills.

Kwanchai Rungfapaisarn

The Nation