Most CEOs expect Q2 economy to mirror Q1, survey finds

The survey was jointly conducted by Dhurakit Pundit University Research Centre (DPURC) and Krungthep Turakij newspaper on 413 chief executive officers on their views about first-quarter corporate performance and the expected economic trend in the current quarter.

On the trend of Thai economic growth in the second quarter, 11.7 per cent of CEOs said it was set to be better than in the first quarter, while 62.1 per cent said it was likely to be the same and 26.2 per cent said it was unlikely to improve. The Cost Index, one of four indices for business, surged to 42 points in April from 31 in the previous month. The figure is projected to rise to 45 in May.

“Such consecutive rises reflect concerns over increased business costs, which come from increases in the minimum wage and rising raw-material prices. Some businesses have suffered impacts from drought,” the pollsters reported.

April’s Income Index, another measure for business, declined to 4 points, meaning that most businesses faced difficulties in boosting their income in the first quarter of 2013. The income measure is forecast to rise to 9 in May.

Given a slight increase in income and consistently rising costs, the Liquidity Index is predicted to stay in the negative territory at minus-6 points in May after decreasing to 4 in April.

Based on the survey, business operations are expected to confront high raw-material costs as the most severe impact in the second quarter. Others included the higher minimum wage, the Thai economic situation, the baht’s appreciation and weakening market demand.

In the first quarter, about 53.1 per cent of the CEOs surveyed said their corporate performance was close to their expectations, the survey found.

About 24.4 per cent had worse-than-expected performance, while another 22.5 per cent’s performance was better than anticipated, it found.