Key sectors’ future looks L-shaped

Industries with employees totalling nearly one-third of the Thai workforce are unlikely to recover this year, even as partial lockdown measures are eased, according to TMB Analytics.

The industries include hotels, restaurants, aviation, entertainment and recreation, auto and auto parts, property, steel, plastic and rubber, and fashion products.

These sectors are expected to see a L-shaped recovery, which will take longer than six months for a turnaround. The coronavirus outbreak, the government’s containment measures and changes in consumer behaviour will continue to dent purchasing power for these businesses, said the research unit of TMB Bank.

The lingering drought, intense competition, technological changes and state regulations could also be a drag on their recovery.

TMB Analytics estimates that employment in these businesses next year will rebound to 2019 levels of 5 million, representing 30.9% of the country’s workforce of 16.2 million.

Total employment is calculated based on registered companies.

The recovery paths of each business are varied, and operators must prepare for the turnaround and set appropriate strategies, the research house said.

Businesses with the prospect of an L-shaped rebound need to work harder because they suffer from not only the impact of the outbreak, but also structural problems and ebbing purchasing power, TMB Analytics said.

Operators in this category must revamp business to improve efficiency and cut costs as much as possible, it said.

The research unit predicts that retail, wholesale, hospital and medical, power generating, IT and telecom, livestock farming and paper packaging businesses will have a V-shaped recovery, given that their products are staples and such firms are dependent on the domestic market.