Slow growth in industrial GDP, jobs [Bangkok Post, Thailand]
(Bangkok Post (Thailand) Via Acquire Media NewsEdge) Dec. 28--Gross domestic product (GDP) for the industrial sector is projected to grow at a slower pace in 2013 than this year's estimate of 5.5% to 6.5% amid the global economic slowdown, says the Office of Industrial Economics (OIE).
Industrial GDP is expected to grow by 4-5% next year from this year's estimated 3.82 trillion baht.
The OIE, meanwhile, has lowered the growth forecast of manufacturing production index (MPI) to between 2.5% and 3% this year from a previous target of 5-6% due to the ongoing euro-zone crisis and slow recovery of the electronics sector.
"We earlier forecast the electronics sector would recover this quarter, but it is unlikely to do so until the second half of next year," said Ittichai Yotsi, director of the OIE's Bureau of Industrial Economics Research.
He said the global economic crisis has lowered electronics demand in trading partners such as China, Japan and fellow Asean members.
The OIE also projects MPI growth of between 3.5% and 4.5% next year. The forecasts are based on a Dubai crude price of US$107 a barrel and an exchange rate of 31.16 baht to the US dollar.
OIE director-general Nattapon Nattasomboon said the nationwide increase in the daily minimum wage to 300 baht will mostly affect the textile and garment industries, with labour costs now averaging 24.4% of total costs compared with 19.2% before the wage rise.
"Businesses that produce for the domestic market will have an option of raising product prices to pass on the burden to consumers," he said.
"But exporters, mostly large firms, have started to adapt by improving production efficiency. If they cannot stay [in Thailand], then they will have to move, and many have already done so before the wage hike."
Mr Nattapon said small and medium-sized enterprises are of the most concern.
Compared with this year, employment in 2013 will grow at a slower rate at 3.8% or 200,000 workers, mostly in the food and garment industries.
"However, the laid-off workforce will switch to something else," he said, adding that the wage increase will affect industrial GDP by nearly one percentage point.
The automotive sector will be a main driver for next year, with 2.5 million units projected, up by 4.16% from this year. New eco-cars will be launched to drive demand next year and in 2014.
Meanwhile, sectors facing risks of termination of favourable tariff rates under the EU's Generalised System of Preferences potentially face a slowdown.
These include firms in the shoe, leather goods, toy, ceramics, seafood, poultry, air-conditioner, spectacle lenses and rubber glove sectors.
(c)2012 the Bangkok Post (Bangkok, Thailand)
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