3-7-2023 (BANGKOK) The Federation of Thai Industries (FTI) has reported that manufacturers in 25 industries are making necessary adjustments to their production plans due to a prolonged export downturn that has resulted in a consecutive eight-month decline in export value.
Industries heavily impacted by this downturn include furniture, machinery, steel and iron, and construction materials, which heavily rely on sales to the United States, as well as European and Asian markets.
Based on a recent survey conducted by the FTI among 201 company executives and its members, it was found that goods exported to Asian markets, excluding ASEAN countries, accounted for 36.2% of all overseas shipments. ASEAN countries made up 27.6%, followed by the European Union at 12.4%, and the United States at 11.4%.
Kriengkrai Thiennukul, Chairman of the FTI, stated that some companies have already started implementing measures such as reducing work shifts and overtime payments, while others are scaling down their production capacity to sustain their operations in the challenging market conditions.
Capacity utilization within these 25 industries has declined due to a decrease in purchase orders for exported goods from overseas markets.
Last year, the World Bank issued a warning of a global recession in 2023 after central banks decided to raise interest rates to counter high inflation.
In Thailand, the Commerce Ministry reported that the customs-cleared value of exports has fallen for the eighth consecutive month, with a decline of 4.6% to $24.3 billion in May.
The FTI anticipates zero export growth for Thailand this year, with a worst-case scenario of a 1% contraction.
Mr. Kriengkrai stated, “The 25 industries are facing the impact of a sluggish global economy and the potential of a recession. We are closely monitoring the situation and preparing measures to support them.”
However, the FTI remains optimistic about a potential improvement in exports in the final quarter of this year as the global economy is expected to recover, driven by increased business activities during the Christmas and New Year celebrations.
The federation is urging manufacturers to explore new markets, including the Gulf Cooperation Council, which comprises Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain, and Oman.
Mr. Kriengkrai also mentioned that South Asia, which includes India, Bangladesh, Pakistan, Afghanistan, and Sri Lanka, holds potential as new markets for Thailand due to their large populations and high purchasing power.
“We need to seriously consider expanding our trade to these countries,” he emphasized.
