Industry Horizon (April 2021)
9 April 2021
Taking steps towards new investment cycle
- Bright outlook for new investment cycle is driven by three visible trends: (i) the Private Investment Index showed the strongest rise in almost three years; (ii) industrial capacity utilization has finally returned to pre-pandemic levels; and (iii) there are more industries expressing confidence.
- Information & Communication is operating at slightly above capacity, while Manufacturing and Agriculture are running at nearly full capacity. Accommodation & Food services and Transport & Storage have recovered by 50% from their steepest slack. Within the manufacturing sector, 29.1% of Thai industries are operating at or above-average production rates. They include Chemicals & Chemical products, Commercial Vehicles, IC & Semiconductors, Electrical Appliances, HDD, and Automotive Engine.
- A K-shaped recovery is a post-recession scenario in which one segment of the economy or industry begins to climb back up while another segment continues to suffer. To survive the post-pandemic world, a country or business needs to transform into one that is based on the provision of modern technology and/or services bound to global megatrends. Thai businesses are also pursuing this trend and preparing to invest substantially in new S-Curve industries.

World trade and output at record levels, resilient to resurgence of COVID-19 cases worldwide
Thailand: New investment cycle in sight
ICT is operating above-capacity, while Manufacturing and Agriculture are close to full capacity
Within Manufacturing, spare capacity varies across the industry; one-third is operating above-trend
New investment cycle for S-Curve industries will help Thailand navigate through the post-pandemic world
M&A activity slow down in Thailand, but is booming in real estate, construction, energy, healthcare sectors
EEC: Current state of play
2021 development strategy for EEC will be multi-pronged
EEC Policy Committee has identified three central high-potential industries
EEC is developing five promoted zones with large investments in the EECd and EECi
Logistics centers will benefit from greater economic activity in special economic zones and border regions
Government is moving forward with the creation of a logistics network linking southern Thailand to the EEC
Connecting markets and distribution networks within EEC
Warehousing is benefiting from growth in e-commerce and rising demand for storage of goods/stock
Industrial Estate: The EEC remains an attractive investment target for industrial estate developers
Oil & Gas: Both tight supply and recovering demand are pushing crude oil prices to pre-pandemic levels
Rising investment in non-oil businesses, especially in EVs, F&B, and alternative energy
Petrochemicals: Phase IV plan aims to boost investment in special economic zones
Power generation: Investment is rising in the EEC in both core and new businesses
Digital industries: Investment slowed in 2020, with money tending to go into enterprise software and digital services
In 2021-2023, investment in digital industries will rise with greater opportunities and support from the government
HDD: Outlook should improve along with the recovering world economy
Still, there are several headwinds ahead
IC: Sunny outlook as supply shortage will ease soon given stronger investment in major countries
Automobile: Clear signs of recovery, so we raised forecasts for output, domestic sales and exports
Manufacturers are submitting applications for BOI support for investment in EV production
Real estate for sale: Operators are slowly releasing new projects in 1H21 to support ‘real’ demand
Joint ventures with foreign investors will tend to switch from condominium to low-rise developments
Real estate for rent: In 1H21, recovery in demand will be restricted to the domestic market
Retail space operators will continue to develop new projects, especially in the suburbs and upcountry
Construction Materials: Production and sales will rise in line with anticipated growth in public-sector investment
Private hospitals are investing in the eastern region to capture the 10-million resident market
Hotels: Vaccination and easing quarantine measures
Restaurants: Businesses increasingly dependent on delivery services
Hemp industry offers new investment opportunities
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