SME Competitiveness Index Falls in Q2, Microenterprises Hardest Hit
Thailand's SME competitiveness index fell to 45.1 in Q2 2025, with microenterprises declining most sharply as high costs eroded profit margins despite improved sales. The sector expects recovery in coming months as oil prices ease, but oper
Thanaworn Pholvichit, rector and chairman of the advisory board at Thailand's Chamber of Commerce University's Economic and Business Forecasting Center, announced that the SME competitiveness index for Q2 2025 stood at 45.1, down 0.8 points from the previous quarter. All measured indices—business conditions, operational capability, and business sustainability—fell below 50, indicating sector weakness. While sales showed improvement, profit margins stagnated due to persistently high costs, especially fuel expenses. The index is expected to improve in July and August as oil prices begin declining.
When broken down by company size, medium enterprises achieved the highest operational capability index at 50.7, followed by small businesses at 47.8 and microenterprises at just 43.1. By sector, manufacturing led at 49.1, buoyed by export opportunities projected to grow as much as 10% this year, with services at 46.5 and trade at 44.9. Vachir Kuntaveetep, dean of the economics faculty at Thailand's Chamber of Commerce University, noted that most business operators reported revenue, orders, costs, net profit, employment, and debt levels remaining flat year-on-year, but liquidity has deteriorated compared to the previous year, resulting in an overall business conditions index of 43.9 for Q2 2025.
On operational capability, most businesses reported product and service quality, technology and innovation, branding, access to capital, and workforce capability remained unchanged. However, debt repayment ability and competitive differentiation declined. The overall operational capability index for Q2 2025 stands at 46.5. For business sustainability, most operators saw income diversification, environmental friendliness initiatives, crisis adaptability, corporate governance, and employee turnover rates holding steady, though profit-generating capacity fell, placing the sustainability index at 44.9.
The university projects MSME sector GDP growth of 2.2 to 2.7 percent in 2025. Business operators are calling on the government to reduce costs—particularly water, electricity, transport, and cooking gas bills—provide favorable financing conditions, lower interest credit access, expand lending limits and repayment periods, help resolve existing debt, boost domestic and international marketing especially through e-commerce expansion and B2B networking events, and develop workforce skills with emphasis on digital and AI competencies.
