Japanese companies say the Thai economy began to recover in early 2016 but showed signs of weakening in the second half, casting doubt on whether the growth trend will continue this year, according to a survey by the Japanese Chamber of Commerce, Bangkok (JCCB).
Some 70% of respondents said their business performance in Thailand improved in the first half of 2016, while 10% said their business was unchanged.
The JCCB normally conducts the survey twice a year to check on the performance of Japanese firms and hear out their concerns, as well as get a sense of the Thai economy.
The latest survey was conducted between Nov 7-Dec 6, with 1,724 questionnaires being sent to Japanese firms in Thailand.
Although most of the companies said they felt the Thai economy was recovering, starting from the first half of 2016, they were still unclear whether Japanese businesses would invest more or expand in Thailand.
"Business sentiment in the first half of 2016, compared to the second half of 2015, turned upward significantly, while that in the second half of 2016 became weaker," the survey said.
Concerning business sentiment in the first half of 2017, only 35% said they expected the economy to improve, while a larger proportion, 45%, expect to see no change in the first half.
Moreover, around 20% were still pessimistic, saying they expected the Thai economy to deteriorate in the fist half of 2017.
Regarding capital investment and business expansion, 33% said they would grow their operations in Thailand, 34% said they would continue at their present clip, and 22% said they would decrease investment.
But most of the existing Japanese businesses in Thailand still believe in the potential of the Asean economy.
Many Japanese firms continued to voice major concerns about the lack of skilled labour, especially engineers and executive workers.
"Regarding the types of job facing personnel shortages, the predominant response was for engineers and clerical managers," the survey said.
The types of engineers needed by Japanese firms are plant management engineers, production management engineers and research and development engineers.
Asked about what issues Japanese companies wanted to be raised with the Thai government, many respondents specified greater promotion of economic measures, including more investment in infrastructure and development of transport systems in Bangkok.
They also want the government to improve public safety, revamp the taxation system, upgrade the education system and relax laws for foreign businesses.