98 exporters collapse in first quarter
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Baht 'just one factor behind closures'
Nearly 100 export companies went out of business in the first three months of the year after the baht started to shoot up.
“However, the baht’s appreciation is only one of many reasons for business closures,” Deputy Commerce Minister Natthawut Saikua said yesterday.
The Business Development Department reported 98 export firms collapsing in the first quarter, of which 42 were in January, 25 in February and 31 in March.
According to the department’s survey, 19 per cent of the businesses winding up last month said they had faced losses. About 99 per cent had not earned enough profit, 26 per cent had not operated the businesses that they had registered for and 16 per cent had conflicts with partners.
Natthawut said that although the situation has not reached a critical stage yet, the department would closely monitor the circumstances to ensure that enterprises would not suffer from any policies or factors, such as the strong baht and Bt300 daily wage, that should be under the control of the government.
Last month, among the 31 exporters that shut down, 17 were in the garment and coffee-growing businesses, six in steel and iron, six in consumer goods and two in frozen food.
Business closures last month dropped 9 per cent from March of last year to 831 cases. However, their capital was worth Bt4.5 billion, up by 35 per cent.
Including non-export companies, closures the first quarter rose 3 per cent to 2,697, while their capital declined 1 per cent to Bt9.23 billion year on year.
Last month, new business registrations increased 5 per cent on year to 5,753. This is the most in 111 years since figures started to be collected on companies.
Natthawut attributed the boom in start-ups to the government’s Bt2-trillion investment project, which has stimulated the growth of construction and development firms.
Initial investment capital decreased 44 per cent to Bt20.56 billion. In the first quarter of the year, 19,673 firms established new firms, rising by 20 per cent year on year. Combined initial investment capital was Bt97 billion, up by 15 per cent.
A survey by Bangkok University showed that 60 economists from 31 leading institutions were confident in the growth prospects of the economy in the next three to six months, driven by domestic consumption and state and private spending.
However, the export sector will continue to feel the pinch from the global economic sluggishness and soaring baht.
The poll was conducted from April 9-19 on the confidence of economists in the Thai economy over the next three to six months.
The confidence index stood at 50.85 for the next three months and 59.51 for the next six months, indicating their optimism for continued growth during the periods.
The index for the current domestic economic situation drooped 0.07 to 56.68, but still stayed above 50, as it has since the first survey last January. The respondents pointed out that private consumption and private and state spending remained the key growth engines while the export sector is still weakening.
