Thailand
Thailand: Production hit by export slowdown
Manufacturers in 25 industries are adjusting their production plans following an export downturn that caused a drop in value for eight consecutive months, says the Federation of Thai Industries (FTI).
These industries, notably furniture, machinery, steel and iron, and construction materials, depend on sales to the US as well as European and Asian countries.
According to the latest FTI survey of 201 company executives and its members, goods exported to Asian markets excluding Asean made up 36.2% of all overseas shipments, followed by Asean (27.6%), the EU (12.4%) and the US (11.4%).
“Some companies have begun to reduce work shifts and overtime payments. Others are limiting production capacity in order to keep businesses running,” said Kriengkrai Thiennukul, chairman of the FTI.
Capacity utilisation among this cluster of 25 industries declined because of a dip in overseas goods purchase orders.
The World Bank warned last year of a global recession in 2023 after central banks decided to raise interest rates in response to high inflation.
In Thailand, the customs-cleared value of exports dipped for an eighth consecutive month in May, falling by 4.6% to US$24.3 billion, the Commerce Ministry reported earlier.
The FTI expects zero export growth for Thailand this year, with the worst-case scenario a contraction of 1%.
“The 25 industries are affected by the sluggish global economy and the prospect of a recession. We are monitoring the situation and preparing measures to help them,” said Mr Kriengkrai.
The FTI is optimistic about an improvement in exports in the last quarter of this year as the world economy should rebound, driven by higher business activities during Christmas and New Year celebrations.
The federation urges manufacturers to look for new markets, including the Gulf Cooperation Council, which comprises Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain and Oman.
Some other regions such as South Asia, comprising India, Bangladesh, Pakistan, Afghanistan and Sri Lanka, can also be new potential markets for Thailand, he said.
“These markets have large populations or high purchasing power,” said Mr Kriengkrai.
“We have to start thinking seriously about how to expand our trade to these countries.”
Source: https://www.bangkokpost.com/business/2604050/production-hit-by-export-slowdown