Medical, beauty industry to continue as 'rising star', UTCC forecasts

However, the UTCC study, weighted on incomes, sales, production costs and demand, found that traditional retail, dried fruits, handicrafts, fisheries and detached houses were sunset businesses for the coming year. 

The survey found that the top “rising star” businesses included medical and beauty, followed by the sugar industry, cement and concrete products, automotive fuel stations, financial institutes, information technology, insurance, the machinery and industrial-materials industry, construction, energy, chemical products, and food. 

These are expected to show the strongest growth next year thanks to high demand among consumers, while climate change and natural disasters would increase demand for such businesses as medical, insurance and finance, said Saowanee Thairungroj UTCC vice president for the research division.

She pointed out that the survey was based on expected growth in gross domestic product of 4.7 per cent next year, 10.6-per-cent expansion of investment, 4.5-per-cent growth in private consumption, a 10.2-per-cent rise in exports, 5.5-per-cent growth in the industrial sector, 5.4-per-cent agricultural growth, and a 3.7-per-cent rise in the number of tourists.

An expected rise in fuel prices next year will accelerate the growth of service stations offering liquefied petroleum gas and natural gas for vehicles as well as other alternative fuels. 

 

Biggest concern 

However, the biggest concern next year will be unexpected natural disasters, which could dampen domestic expansion and the growth of many businesses.

The rising minimum labour wage and slowdowns in economic expansion and consumption in the first quarter will also cause difficulty for some business expansion. 

Thanavath Phonvichai, director of the university’s Economic and Business Forecasting Centre, said the impact of this year’s flood would reduce demand for detached houses. 

The rising cost of diesel and impacts from climate change will increase difficulty for the fishery industry. Higher production costs coinciding with low domestic consumption will also cause difficulty for steel manufacturing. 

However, the steel industry could become an outstanding business after integration under the Asean Economic Community by 2015, as demand will increase from the larger market.

Businesses that rely on old-fashioned design and slow development such as bleaching, textiles and garments, leather goods, and handicrafts are expected to show poor performance due to lower demand and high competition from China and Vietnam, as those countries have lower labour and production costs. 

Manufacturers will have to bear higher production costs because of the increase in the minimum wage, and that could lower the competitiveness of Thai enterprises, Thanavath said.