GENERAL NEWS
Higher productivity focus for Thailand
Higher productivity growth in Thailand will be a key source of stronger economic growth and better competitiveness , according to the Thailand Manufacturing Firm Productivity Report , a joint research study from the World Bank and the Monetary Policy Department of the Bank of Thailand .
“ For Thailand to achieve its national development strategy target to transition to high-income status by 2037 and to recover from the COVID-19 pandemic ’ s economic impact , it must accelerate structural reforms to boost investment and accelerate productivity growth of manufacturing firms . Thailand would need to sustain a long-run average growth rate of over five per cent beyond 2025 , said the report . Achieving this growth rate would require nearly doubling the current rate of both public and private investment to 40 percent while maintaining one of the fastest Total Factor Productivity growth trajectories , similar to that of South Korea when it was at Thailand ’ s level today of GDP per capita ,” explained the report .
“ A country ' s ability to improve its standard of living depends almost entirely on its ability to raise its output per worker , or producing more goods and services for a given number of hours of work . For that , Thailand needs to promote the shift of labour away from low-productivity sectors , such as agriculture , towards higher-productivity sectors such as manufacturing ,” said Birgit Hansl , World Bank Country Manager for Thailand . “ Increasing the productivity of firms within the manufacturing sector itself will also play a key role in job creation and more inclusive growth , particularly in the post-COVID recovery phase .”
In the past decade , weak productivity growth has already stalled Thailand ’ s economic growth momentum with economic growth falling from an average of 4.8 per cent in 1998-2008 to 3.3 per cent in 2008- 18 . The growth challenge is intensified by the COVID-19 pandemic , with the economy projected to contract by 6-7 per cent in 2020 and the potential for longer term adverse economic impacts , including a further decline in productivity .
“ The findings from the study point towards a productivity agenda that focuses on enhancing competition in the domestic economy , increasing openness to foreign direct investments and promoting an ecosystem for firm innovation ,” confirmed Kiatipong Ariyapruchya , World Bank Senior Economist for Thailand .
Policy recommendations include implementing the new Competition Act , promoting openness and a higher focus on skills development to meet the needs of an innovative knowledge-based economy . n
UK focuses on new products and agility to counter risks
Fears over the impact of the UK ’ s new trading relationship with the EU and the attractiveness of the UK for both investment and talent are clouding the outlook for manufacturers as they enter 2021 , according to a major survey published recently by Make UK and PwC .
The survey shows that a third of companies believe the investment prospects for UK businesses will decrease having left the EU , with just 18 % of companies believing they will increase . In addition , just over a quarter of companies ( 26 %) believe exports to the EU will fall , with just 16 % believing they will increase . A third also believe the UK ’ s ability to attract international talent will decrease , with just 11 % believing the UK will be a more attractive destination outside the EU .
“ However , despite this , more companies believe the opportunities outweigh the risks for their businesses given significant investments in boosting productivity and agility , while manufacturers are also more confident about the prospects for their own companies than they are for either global or UK economies ,” commented Make UK .
The survey also shows that customs delays are seen as the biggest risk to companies ( 47 %) while concerns over national and local lockdowns were the second biggest risk ( 46 %). Increased costs of regulation is reported as the biggest risk by just under forty per cent ( 39 %) while over one in ten companies ( 14 %) also believe a relocation of a major customer out of the UK is their biggest risk .
“ The transition to new trading arrangements with the EU was always going to be the biggest challenge facing manufacturers this year and the fact we have an agreement in place doesn ’ t alter that . However , just as the sector rose to the challenge of aiding the national effort at the start of the pandemic , it is clearly set to do so again as we re-build the economy and take advantage of the opportunities from digital technologies ,” explained Make UK .
“ To ensure we cement the role of industry in the future economy , we need to see a strategic vision from UK Government for the whole economy across the UK . This must go way beyond short-term tinkering and involve an industrial strategy that takes at
least a decadelong horizon with the whole of Government putting its shoulder to the wheel to deliver it ,” added Stephen Phipson , Chief Executive , Make UK .
After the falls in 2020 in response to the pandemic ,
Stephen Phipson , CEO , Make UK .
recruitment is forecast to pick up - with 44 % of companies expected to increase employee numbers compared to 25 % who are planning to reduce headcount .
“ While controlling costs remains the biggest priority for companies , 57 % of manufacturers are investing in new product development with a similar number also planning capital investment , both of which encompass a significant commitment to digital technologies . Encouragingly , a quarter of companies are looking to re-shore overseas activities while 25 % are looking to identify new or additional suppliers in the UK as a high priority ,” commented Make UK .
54 % of companies are expecting to see an increase in their productivity in 2021 . Almost a third of companies ( 30 %) are planning to enter new markets in 2021 . The survey of 206 companies was conducted between 11-30 November 2020 . n
8 | sheetmetalplus . com | ISMR February 2021