In 2024, the number of factory employees working fewer than 40 hours a week increased by 11%.
PUBLISHED: 7 Feb 2025 at 18:12
Thai factory closures are anticipated to rise in 2025, particularly affecting small businesses struggling with limited capital, according to recent insights from economic analysts. The manufacturing sector faces ongoing challenges, leading to a higher rate of factory closures, with over 100 shutting down each month for the past two years.
Small and medium enterprises (SMEs) are hit the hardest, as the average registered capital for companies that closed in 2024 was 3.8 times lower than those that shuttered in 2023. The total registered capital of these closed factories dropped significantly, amounting to 47.8 billion baht in 2024, compared to over 180 billion baht the previous year.
During the 2021-2022 period, there were 4,855 factory closures compared to 1,818 new factories opening, resulting in a net loss of around 127 plants monthly. The following years saw 4,302 closures and 3,034 new establishments, leading to a more modest net loss of 53 plants each month.
Industries such as furniture, electronics, garments, automotive, and steel experienced the highest number of closures. Factors such as sluggish economic growth, weakened purchasing power, and structural issues in the manufacturing sector contributed to these trends.
Additionally, external challenges, including growing US-China trade tensions and reduced global demand, have further impaired the competitiveness of Thai manufacturers.
New factory openings may offer some respite by absorbing laid-off workers; however, there remains a concerning trend of reduced working hours. In the first half of 2024, factory workers logging fewer than 40 hours a week rose to 457,000, reflecting an 11% increase from the previous year.
This decline in hours notably affects lower-income manufacturing employees, diminishing their purchasing power. Economic experts predict a continued rise in factory closures this year, correlating with a decline in the country’s manufacturing index, which fell by 2% year-on-year in Q4 2024.
