Most SMEs expect better 2H economy, but liquidity a worry, survey finds
July 01, 2014 00:00 By The Nation
Most small and medium-sized enterprises believe that the economy in the second half will outperform the first half, according to a survey by Dhurakij Pundit University Research Centre (DPURC).
The centre studied SMEs’ perception of the economic outlook and access to finance. The results were based on information from 751 respondents in 12 provinces. The data were collected from June 1-15.
When asked about the economic outlook in the second half of this year, 81.6 per cent said they believed that the economy would perform better than in the first half; 10.2 per cent about the same; and 8.2 per cent worse than in the first six months.
Those who believed that the economy would perform better were asked to provide their estimates of the growth of gross domestic product in the second half as well as full-year growth. On average, GDP growth in the second half was expected to be around 2.89 per cent, and annual growth about 2.64 per cent.
On anticipated revenue growth in the second half, 40.2 per cent expected their sales to grow, at an average rate of 19.6 per cent; 38.7 per cent about the same; and 21.1 per cent expected their sales to decline.
When asked about major factors that could affect their businesses (more than one answer was permitted), 83.4 per cent said the revival of the Thai economy; 70.5 per cent consumer confidence; 62.5 per cent access to finance; 31.5 per cent political stability; and 12.6 per cent other reasons such as the global economy, depreciation of the baht and increased government spending.
Small businesses said their liquidity was sufficient to cover 30 to 45 business days, while medium-sized businesses enjoyed greater liquidity reserves, of around 60 to 90 business days. Compared with DPURC’s previous survey, liquidity for both groups had improved slightly.
“We have seen several positive indications that the economy will be on track in the second half of this year,” DPURC director Dr Kiatanantha Lounkaew said. “However, this does not mean that SMEs will recover at the same pace as the overall improvement of the country.
“SMEs have been suffering from economic slowdown since the third quarter of 2013. It will take them another three to six months before they can get back to normal.
“Liquidity is one of the key hindrances that require immediate attention, especially for small enterprises. Without a proper support package to address this issue, the path to recovery for such enterprises will be a long one.”