SUMMARY
- E-Commerce continues to be a primary demand source for warehousing with all major players looking to increase or upgrade their space.
- Thailand's industrial economy was down overall in 2020, but with some positivity returning, there are early signs of a likely pick-up in last half of 2021.
- The Thai government is hopeful of a sharp increase in FDI in 2021, though this will be difficult given the current quarantine requirements for international arrivals.
MARKET OVERVIEW
Following the latest COVID-19 outbreak at the end of 2020, the Thai economy saw further GDP losses, closing the year down -6.6% from 2019. Thailand's manufacturing sector also saw considerable falls in activity, as both the local and international economies struggled, with the manufacturing production index (MPI) posting a -2.44% drop from 2019. Total exports also shrank, with a fall of 6.3% from 2019. Automotive and petro-chemical products were two of the worst hit industries, with falls in exports of 22% and 11.4%, respectively. Whilst in contrast aircrafts, ships, floating structures and locomotive faired particularly well with an 18.4% increase.
Exports are expected to grow again in 2021 by up to 5%, driven by a global economic recovery and an increase in global consumption, however, both COVID-19 and the strength of the Thai Baht remain a concern for exporters. Cargo container shortages have also been an issue for many exporters which was due to the trade imbalance between Asia and the West that was exaggerated by the speed at which the regions have been able to recover from COVID-19. Thailand is estimated to have suffered a shortage of 1.5 million containers in 2020.
