Thailand's Manufacturing Sector is Forecast to Grow Again in 2022 - By Daniel Bull
It’s common knowledge that Thailand definitely handled the first outbreak well, however, we are in a heavy export market and the 22nd largest exporter in the world. That means, the market here is driven by the economies of who we export to, the largest being China and the USA. The demand for products within these countries fell drastically, the US has the highest number of deaths in the world from the pandemic and as a result of this, regardless of how well Thailand handled the outbreaks, the need for manufacturing was not there.
Fast forward to 2021, and the tables seem to have been reversed, I’m not here to comment on the vaccination drives of each country, but Thailand has been slow off the mark and countries such as the UK, US, China and EU are much further ahead in vaccination numbers, returning at least to some more normality than Thailand.
This has obviously swung the balance, and right now, the demand for products has increased. This increase has exacerbated the issue in Thailand, raw materials shortages and labor shortages are poking holes, with the manufacturing production index missed by 6% in our previous month.
This might sound negative, but this situation has the potential to easily fall or rise either way.
Let’s look at the facts right now:
- Thailand averaging 683,791 vaccines per day
- 2022 GDP forecast to expand 3.7%
- Chip shortage hampering electronics and automotive production. (two of the top 10 exports)
- Thailand to open borders as projected in Jan 2022 quarantine free. (for tourists and business trips)
- Potential expansion to Eastern Economic Corridor promotions, with 300 – 400 billion THB investment per year.
So, I will avoid being typically British and pessimistic from this point forward.
From a Recruiters perspective, we are seeing a steady increase in our portfolio, and I would suggest this is happening with the growth of the industrial sector. It is not so simple as a blanket growth in all sectors and markets, but, with government lead initiatives such as the EEC, and business continuity measures, restructuring of manufacturing and supply chains will make Thailand an attractive place to invest, especially if we consider the cost of operations compared to other locations.It would seem that in 2022, we are projected to grow in manufacturing. I do say this with cautious optimism, but with hope that this will happen.
To close off this article I would like to pass all of the readers a message: If you’ve got this far, thank you, I appreciate your time, please feel free to interact with me and provide me with your thoughts. We have all been through this together, and not just in Thailand, but across the world, with time and experience economies will recover, markets will become more resilient and all of us will return, stronger than before.
Daniel Bull, ES Project Manager/Assistant Head of Industrial
Connect with our expert at: Daniel_b@ancor.co.th