Published on November 15, 2007
Peter Walker, partner of Grant Thornton Thailand, said the survey explored the views of 7,200 business leaders including chief executive officers, managing directors and business-owners in 32 countries which represent 81 per cent of global gross domestic product.
Walker said the survey showed that 30 per cent of Thai business people expressed low confidence in their country's economic prospects compared to the East Asian average of 54 per cent. Political turmoil and policy concerns were the main factors to depress Thai business optimism.
He added that the result of the political chaos affecting business was shown by the slowdown of capital investment because Thai business people had decided to wait for certain economic policy after the election. Moreover, exporters suffered from the appreciation of the baht, which decreased export volume this year.
"Many Thai business persons are adopting a wait-and-see strategy. They hope that business figures will be improved by the outcome of the forthcoming election and the new government's policy actions," Walker said.
From the Grant Thornton International Super Growth Index, Walker said the US was top for the third year running, while Thailand slipped from 18th place to 30th. Nine per cent of Thai companies were classified as Super Growth companies in 2006 but in 2007 only 5 per cent fell into this category. The percentage of Thai companies in the Normal Growth category also dropped from 45 per cent to 25 per cent.
Hong Kong and India have fallen significantly in the number of Super Growth companies, while the Philippines and Russia have both increased considerably.
Walker said the survey also indicated that two constraints for business expansion in Thailand were reduced demand and weak labour skills. The most skill shortages are in IT, finance and customer management.
"Compared with international levels, Thai companies suffer more than others from the loss of skilled workers with a negative impact of 74 per cent," he said.
Walker said other weak points for Thai business were a lack of energy-cost management and lack of attention to risk management. The survey showed that only 37 per cent of Thai companies had assigned senior managers to oversee corporate risk. However, Thai businesses reported they were good at corporate governance.
"If Thai companies do not pay enough attention in risk management, it will be quite a problem for them in the long term," Walker said.
Walker also said most Thai business leaders expressed concerns over China's advantage in low-cost manufacturing, which has a negative impact for companies here.
He said the government should play a leadership role in making clear economic policy and start fundamental economic strengthening. If the policy is clear, foreign investors will have the confidence to inject money into Thailand.
"In the short term, Thailand has lost investment opportunities to Vietnam and Malaysia due mainly to its uncertain investment policy. However, in the long-term, I still believe that Thailand shows a bright outlook and could return to be the most attractive country among foreign business persons, thanks to its strong infrastructure," Walker said.