Survey: Thai SMEs most pessimistic

Thai small and medium-sized enterprises are more pessimistic than their regional peers with the majority expecting no global economic recovery within the next two years, a recent survey shows.

Monrudee Theeraworawit and Greg Carstens of UPS discuss a survey that revealed a majority of Thai SME operators do not expect a recovery in the next two years.

Meanwhile, struggling US automakers could dampen Thai SMEs' prospects further as many operate in auto-related sectors, said UPS, a global logistics company which surveyed 1,200 SMEs in the Asia-Pacific region.

"As a whole, Thai SMEs have a more pessimistic view of the global economic recovery than the rest of the region with majority projecting the recovery beyond 2010," said Greg Carstens, managing director of UPS Thailand.

Only 21% of the local companies surveyed expect the world economy to recover in 2009 or 2010, compared with 46% from the entire Asia-Pacific.

Internal political turbulence and unclear SME policies have profound impacts on Thai operators' concerns. About 80% of local firms said a lack of government support as the biggest obstacle to SME competitiveness.

"Thai SMEs want the government to do more to help them weather the recession. In addition to the market slowdown, cashflow and rising costs are their key concerns," said Mr Carstens.

Only 23% of local respondents expect some growth this year in light of the global economic downturn and domestic political turbulence.

"Though the majority expects flat growth this year, a good percentage of Thai SMEs surveyed still anticipated some growth prospects."

Growth opportunities are seen in agriculture, forestry, fishing , leisure and tourism, said Monrudee Theeraworawit, marketing manager of UPS Thailand.

The automotive sector expects a recovery in the next three to five years. Toyota and other Japanese carmakers will play important roles in boosting the sluggish local automotive industry after General Motors and Chrysler filed for bankruptcy protection, she said.

Despite the downturn, most Thai SMEs vowed to retain staff with only 11% planning to cut headcounts. About 10% planned to increase their workforce this year, said Mrs Monrudee.UPS says that SMEs make up 95% of businesses in the Asia-Pacific region and employ 80% of the region's workers.

The UPS Asia Business Monitor 2009 survey was conducted between Jan 8 and Feb 27, covering 150 SMEs in China, 50 in Indonesia, and 100 each in Thailand, Australia, Hong Kong, Japan, Korea, India, Taiwan, Malaysia, Singapore, and the Philippines.

Relate Search: Monrudee Theeraworawit, Greg Carstens of UPS