Hundreds of factories in Thailand are being forced to close, a devastating blow that is leaving thousands of hardworking individuals without jobs. The government is now under immense pressure to take immediate action to prevent further economic and social upheaval.
The Nation reported, citing a statement from the Federation of Thai Industries, that Thailand is facing a sharp increase in factory closures, with 561 plants already shutting down this year alone, mainly in the steel and metal industries.
The Federation of Thai Industries (FTI) warns that if production costs, including energy, transport and interest rates, remain high, mass plant closures will become even more rapid. It’s a critical moment, and Thai industrialists are urgently calling on the government to step in and provide the necessary support to businesses.
Federation vice-chairman Pekthong Thongyai said FTI is closely monitoring the trend of factory closures. According to the Department of Industrial Works, 561 factories closed from January to May, losing 15,342 jobs, an average of about 3,000 jobs per month.
These included 12 plastics plants, 11 metal fabrication plants and eight wood processing plants. High production costs, including interest rates, have raised fears that more closures may follow.
The Federation of Thai Industries calls on the government to take additional measures to support entrepreneurs. However, businesses must also adapt and look for ways to cut costs.
Over the past two years, a flood of low-priced goods has inundated the market, intensifying competition. Despite trade barriers imposed by the United States and Europe on Chinese goods, China’s high production levels continue to flood the Thai market. This situation is posing a significant challenge for Thai enterprises, making it increasingly difficult for them to compete.
Data shows that 678 factories will close in 2021, 997 in 2022, and 1,337 in 2023, a 60 per cent increase from 2022.
Nava Chanthanasurakon, also vice-chairman of FTI, expressed concern that the current economic situation could lead to more factory closures, with the trend worsening compared to the past two years. This is due to the ongoing trade conflicts between the US, EU and China and the constant influx of cheap goods into the ASEAN region.
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