US companies in Thailand have positive expectations for the economy, profit and expansion this year, according to the Amcham Business Survey Outlook released yesterday.
"Although the survey was conducted in May, during the height of the unrest and demonstrations in Bangkok, US businesses in Thailand maintain a relatively optimistic business outlook in 2010," said Joe Geagea, president of the American Chamber of Commerce in Thailand (Amcham). "More than half of those responding to the survey still expect overall economic growth in Thailand."
The annual survey was conducted by Amcham Thailand in collaboration with six American Chambers of Commerce in the region.
Although the percentage of respondents expecting a 2010 profit increase declined from 70 per cent in the 2009 survey to 63 per cent, this latter rate still remains fairly strong.
Profit expectations also quickly pick up again in 2011, with 88 per cent of respondents predicting a profit increase next year. More respondents also foresee an increase in the workforce.
The largest percentage of respondents expects a workforce increase for the first time since 2008, and the rate of those who expect this increase rose from 32 per cent in 2009 to 49 per cent in 2010.
"US businesses are hoping to expand in Thailand; however, we are seeing an increasing concern about the availability of lowcost labour, which may impact expansion plans," Geagea said.
Personal security remains a major strength in Thailand, despite falling from a 70 per cent satisfaction rate in 2009 to 61 per cent in 2010. Concern with the category of "stable government and political system" did not jump as much as might be expected in the midst of the protests, only increasing from 74 per cent in 2009 to 77 per cent in 2010.
Concern with other governmentrelated factors such as "laws and regulations" and "tax structure" actually fell below 40percent dissatisfaction rates, removing them from the list of major concerns.
Respondents are also increasingly positive about government guidelines, with a clear movement from dissatisfaction towards a more neutral stance in this area.
"This positive trend reflects the government's proactive stance in improving business conditions for businesses such as the recent customs reforms," Geagea said.
Thailand respondents continue the Asean trend of having an increasingly positive regional and world business outlook versus that of 2009. In a dramatic jump from the 2009 rate of 30 per cent, 70 per cent of respondents predict that the world economy will do better or much better in 2010.
In this improved world economy, Thailand respondents predict an increasingly important Asean role, looking to the Southeast Asian bloc as one of the economies to lead the world out of the downturn. Here, those who think Asean importance will increase in the next two years jumped from 60 per cent in 2009 to 71 per cent in 2010, and the largest percentage of respondents - 86 per cent - cite economic recovery as the reason for this increased importance.
Likely as a result of this perceived increase in Asean importance over the next two years, the percentage of respondents in Thailand that plan to expand in Southeast Asia grew from 74 per cent in 2009 to 81 per cent in 2010. These respondents cite "potential for business growth" (81 per cent), "economic recovery" (52 per cent) and "increasing market share" (52 per cent) most often as the reasons for this expansion in the area.
Asean trade agreements and Asean integration help significantly to make the area more attractive to business, as 78 per cent of respondents find the Asean Free Trade Agreement useful and 75 per cent find Asean integration important to doing business in the region.
"In general, our members in Thailand remain positive despite the political tensions and recent violence and increasingly optimistic about the ability of Asean to lead the way in helping the world to recover from its economic downturn," Geagea said.
Amcham is the leading international business association in Thailand, with nearly 2,000 members representing more than 650 US, Thai and other international companies. Member companies have invested more than US$35 billion (Bt1.1 trillion) in Thailand and provide more than 250,000 local jobs.