Overall conditions for small and medium-sized enterprises (SMEs) are expected to improve by the middle of next year after the Thai economy returns to fulfilling its growth potential.
The latest poll of 1,249 SME respondents nationwide found that they were more optimistic of improved operating performance in mid-2019, in line with the country's GDP growth, though income and profit remain weak at the moment, said Thanavath Phonvichai, vice-president for research at the University of the Thai Chamber of Commerce (UTCC).
Some SMEs have rebounded in accordance with the global economic rebound, but the US-China trade dispute and volatility in foreign exchange and oil prices have limited the SME recovery, Mr Thanavath said. Only SMEs in the service sector, including tourism, hotels, transport and property development, have seen improvement, he said.
The SMEs Competitiveness Index, a survey by the UTCC and the Small and Medium Enterprise Development Bank of Thailand (SME Bank), rose by 0.3 points from the first quarter to 48.5 in the second, marking a winning streak since the third quarter of last year.
An index level below 50 points indicates that the SMEs are not doing well, with inconsistent sales and purchase orders.
The SMEs Sustainability Index, one among three sub-indices of the SMEs Competitiveness Index, rose 0.5 points from the previous quarter to 52 points in the second quarter, marking gains for three consecutive quarters.
The SMEs Competency Index edged down 0.1 points from the previous quarter to 50.2 in the second quarter, while the SMEs Situation Index increased 0.5 points to 43.3.
Mr Thanavath said SME operators should keep a close watch on the baht, which continues to vacillate, as well as impacts from the tit-for-tat trade tariffs between the US and China and high oil prices.
Regarding flooding, he said the damage is estimated at no more than 10 billion baht and it could shave a mere 0.5 percentage point off the country's GDP this year. The UTCC will monitor how rapidly the floods recede, he said.
In the meantime, Mongkol Leelatham, president of SME Bank, said small SMEs can better access the bank through its online app, SME D Bank. Those who apply to the bank for loans through the app can seek up to 1 million baht, which will not take more than 20 days to process, and the credit limit for the online channel will be raised to 5 million for each borrower next year, he said.