Natural Rubber Processors: Challenging outlook

The Thai natural rubber (NR) industry is facing a challenging outlook in 2025, shaped by shifting US trade policies, market uncertainties, and persistent supply-demand imbalances.

US Tariff Pressures Deepen Economic Challenges for Thai Economy

The potential hike in US tariffs on goods imports from Thailand is expected to have a limited direct impact on rated issuers, with fewer than 5% exposed to the affected product categories. Nonetheless, the broader economic context —marked by subdued domestic consumption, sluggish private investment, and weaker external sentiment —continues to weigh heavily on credit quality, especially over the short to medium term.

Engineering and Construction: Public Projects Provide Growth Impetus Amid Private Project Slowdown

TRIS Rating projects a “neutral to negative” credit outlook for Thailand’s engineering and construction industry in 2025, with limited market growth. Public-sector projects continue to offer growth opportunities, while private-sector demand remains fragile. As a result, rated contractors focused on private projects have seen diminished backlog-to-revenue ratios. Although profitability may improve due to easing construction costs, debt ratios are weakened due to prolonged cash conversion cycles caused by delayed disbursements and extended payment terms.