Thailand celebrated its first post-pandemic Songkran festival in April this year, and the internationally famous water-splashing Thai New Year Festival drew in large numbers of international visitors.\u00a0 After a challenging few years for the economy (not least the tourism industry), it was a clear and welcome sign that life is moving forward again.
It\u2019s not just tourists that are flocking there though \u2013 foreign manufacturers are increasingly seeing Thailand, Southeast Asia\u2019s second-largest economy, as a \u201cdestination of choice\u201d.\u00a0 One high-profile example: in mid-April Nikkei reported that Apple is in talks with suppliers to make MacBooks in Thailand, as the company looks to diversify its supply chain outside of mainland China.\u00a0 Apple has already been making the Apple Watch in Thailand for more than a year, it claimed. Sony is looking to scale up production there too, adding 70% to its chip facility north of Bangkok by FY 2024.\u00a0 Thailand has been one of the top FDI destinations for Taiwan-based PCB makers in recent years, on the back of strong incentives from Bangkok, and this sector of the economy appears to have much potential for growth.<\/p>\n\n\n\n
AUTOMOTIVE - PRESENT AND FUTURE<\/strong><\/p>\n\n\n\n Thailand\u2019s automotive sector is a real success story too, with giants such as Toyota, Mitsubishi, Isuzu, BMW and Ford all manufacturing there for many years (Toyota recently celebrated 60 years of operations in Thailand, and now employs around 275,000 people there). There are clear signs that the next generation of electric vehicle production is heading Thailand\u2019s way too, with China\u2019s market leader BYD breaking new ground on a production plant in Rayong province in March, and Toyota president Akio Toyoda declaring \u201cThe future for Toyota and Thailand is very bright\u201d as he introduced the company\u2019s first electric pickup truck for emerging markets, also to be produced there.\u00a0 Most European countries can only dream of such investment. A GREAT PLACE TO DO BUSINESS<\/strong><\/p>\n\n\n\n When the World Bank last produced its Ease of Doing Business rankings in 2019, Thailand had moved up considerably, to 21st place overall \u2013 a great achievement, and one place higher than Germany.\u00a0 It had been ranked 46th just 2 years earlier.\u00a0\u00a0 Thailand\u2019s logistics infrastructure and services were ranked 2nd in ASEAN after Singapore, and 7th in Asia overall, according the World Bank\u2019s Logistics Performance Index (2018).\u00a0 And as a member of AFTA and RECP, it\u2019s a great hub for operations in the Asia Pacific region.
The S&P Global Thailand Manufacturing PMI stood at 53.1 in March 2023 - the fifteenth consecutive month in which the Thai manufacturing sector has been in expansion, and at a very healthy rate too.\u00a0 Business confidence is at a post-pandemic high, and continued to improve in March, according to Thailand\u2019s own Business Sentiment Index, with up-ticks in performance, total orders, investment, employment and production.<\/p>\n\n\n\n
Rayong province on the eastern seaboard, where BYD are making that massive new plant investment for the production of electric vehicles, along with its neighbours Chonburi and Chachoengsao, are together the beneficiaries of Thailand\u2019s Eastern Economic Corridor (EEC) flagship project, described by Reuters as \u201carguably the most ambitious connectivity project in mainland southeast Asia\u201d, with special incentives to promote FDI, digitalisation, infrastructure renewal, and social uplift.\u00a0 If things keep on in this direction, it\u2019s not hard to imagine the impact spreading out beyond the EEC, and the whole country benefitting, before too long.<\/p>\n\n\n\n