New business registrations set for 10% growth as economy recovers

Meanwhile, the Commerce Ministry reported yesterday that the consumer confidence index was up sharply from 21.2 points in December to 24.2 last month, reflecting better post-flood sentiment.

Consumer confidence is likely to grow considerably in the remaining months on the government’s policy to boost the economy and an expected rise in incomes, said Yanyong Phuangrach, permanent secretary to the ministry.

However, concerns that could influence confidence include higher living costs and the adequacy of flood-prevention measures.

The Business Development Department reported that the number of newly registered companies grew by 9 per cent to 55,403 businesses last year. New investment capital rose 13 per cent, at Bt364 billion.

Deputy Commerce Minister Siriwat Kajornprasart said the number of new businesses should increase this year after a substantial fall since late last year because of the floods.

The main factor contributing to this year’s predicted new-business growth is the recovery of the post-flood economy following the government’s stimulus packages. 

Many new businesses are eyeing investment, he said, particularly in construction as many people would like to restore their houses. Small and medium-sized enterprises now have a brighter future in starting up businesses, Siriwat said.

The department expects the number of new businesses to reach 60,000 this year, although the devastating flooding caused a contraction in registrations in the final quarter of 2011.

Last year, the number of closed-down businesses shot up by 43 per cent to 10,400 companies. This January, the number of newly registered businesses was down 4 per cent year on year to 5,087 companies, but this was still a massive 99 per cent higher than the December level, reflecting increased confidence to start up new firms after the flooding.

New companies’ combined investment capital in January stood at Bt17.44 billion, 7 per cent lower than in the same period last year but a 55-per-cent increase over December. Most new businesses registered last month were in the following sectors: construction and property development, retailing and wholesaling of construction materials, and trading of machinery and equipment.

Seventy per cent fewer businesses, some 1,094 firms, shut down operations than in December. However, compared with the same period last year, the number of shutdowns grew by 79 per cent.

Siriwat said the shutting down of firms was normal, with most of the businesses that were wound down having been set up to serve particular projects and their contracts having expired. Only a few firms had to cease operating because of a lack of liquidity or tough competition. These were mostly in entertainment, property development and the retail and wholesale of electrical appliances, he added.