Huge swing in business optimism in Thailand

Thai business sector's confidence jumped to 71 per cent in the third quarter from 13 per cent in the second quarter. Elsewhere in Asean, optimism remained the same in Indonesia, reflecting a “wait and see” sentiment for the new president to take office. In Singapore, optimism rose from 59 per cent to 66 per cent and in Malaysia from 49 per cent to 50 per cent.

"Whilst it is no surprise that Thai business optimism was higher in the third quarter, the degree of change was sharper than expected. However, it has to be sustained. Not since the third quarter of 2010 through to the third quarter of 2011 have we seen a period of sustained business optimism," noted Andrew McBean, partner of Grant Thornton in Thailand and a specialist in the AEC.

“This may simply be the result of a ‘honeymoon period’ where there has been some pleasing rhetoric from the new government. Substantial, deep and institutional economic reforms are critical to ensure Thailand regains its economic strength, which in turn will position us strongly for the AEC. The return of business optimism,after many tumultuous quarters, is a very welcome first step.”

Thailand's business optimism figure reflects measurements across a number of categories. Thai business optimism rose in revenue expectations, exports, employment, profitability, investment in new buildings, investment in plants and machinery, increases in research and development (R&D), an increase in finance, a decrease in red tape and the availability of skilled labour.

However, there was continued concern relating to; a shortage of orders, transport infrastructure, growth initiatives, rising energy costs, salary rise expectations and ICT infrastructure.