New company registrations hit a two-year high in March
Registrations of new companies reached a two-year high in March, rising 8 percent year on year and 10 percent over February, illustrating that the local business community remains confident in the country’s economic fundamentals, despite a weak global environment and lukewarm domestic growth.
Measures by the government to promote investment, the establishment of special economic zones and a still robust tourism sector all contributed to convincing entrepreneurs to invest and open new businesses, Pongpun Gearaviriyapun, director-general of the Business Development Department, said last week.
New business registrations totaled 6,176 in March, an increase of 8 percent year on year and a rise of 10 percent compared to the previous month. In addition, the total number of new companies that opened in the first quarter of 2016 was 35 percent higher than in the last quarter of 2015. The number of new businesses established during the first three months of this year was 17,523.
The bulk of the new companies are engaged in construction, property development, machinery wholesaling, restaurants and food retailing, and consulting, Pongpun said.
The Department, part of the Ministry of Commerce, is forecasting that 60,000 to 65,000 new businesses will register in 2016.
Even more promising were the figures for investment by new companies. Initial investment capital soared by 70 percent year on year in March to $778 million. In the first quarter of this year, total initial investment increased 57 percent year on year to $2.2 billion.
Pongpun said that the Department’s measures to facilitate start-ups were also a factor in spurring business formation, along with confidence among the business community that the country’s economic recovery, while slower than some had hoped for, nonetheless remains steady and should continue to improve. Although Thailand’s growth rates have been lower in recent years compared with a few neighbors in Southeast Asia, they have been comparable to growth rates in some of the more developed economies in the region such as Singapore and Malaysia.
The ratio of openings versus closings was also positive at roughly six to one, as March also saw 1,183 companies shut their doors for good, a 0.2 percent increase over the same month last year. For the first quarter of 2016, however, the total of 3,574 businesses that closed was 3 percent lower than during the same quarter of the previous year.
Negative factors that might have caused some to postpone or decide against opening or expanding include the ongoing drought, slow export growth and volatile oil prices, all of which could erode purchasing power.