Thailand’s Business Confidence Declines Amid Wage Hike Worries

[webfact]

 

Business confidence in Thailand has taken a notable dip as the latest Thai Industries Sentiment Index (TISI) dropped in April, highlighting mounting concerns among entrepreneurs over economic pressures, notably a proposed increase in the daily minimum wage. The TISI recorded 90.3 points in April, a drop from March's 92.4 points, according to the Federation of Thai Industries (FTI).

 

Entrepreneurs are facing a barrage of challenges, including anticipated lower sales, production hurdles, and the financial ramifications of the government's policy shifts. Their anxieties chiefly stem from the proposed wage hike, rising domestic diesel prices, and increasing raw material costs.

 

Kriengkrai Thiennukul, President of FTI, underscored the stress the proposed uniform daily minimum wage boost to 400 baht (£9) imposes, alongside concerns over higher diesel prices impacting operational and logistics costs.

 

The retail diesel price experienced an increase from 30 baht per litre to 33 baht per litre from April 20 to July 31, following the expiration of the diesel excise tax cut. Furthermore, the Labour Ministry has proposed implementing the daily minimum wage hike by September or October, pending final approval from the tripartite wage committee.

 

 

Earlier this year, the government raised the daily minimum wage to rates between 330 and 370 baht (£7.50 - £8.50), representing an increase of 2 to 16 baht. The tripartite wage committee later approved a rise to 400 baht for certain sectors, such as large hotels and tourism businesses in 10 provinces, effective from April 13.

 

According to the FTI, current wage levels, paired with the surge in energy and raw material prices, are straining businesses. Labour-intensive industries have recorded a 20% increase in operating costs, with smaller companies experiencing a 5-7% rise. Industries like cement, steel, iron, and glass have been hit hardest, with costs skyrocketing by 30-40% after wage adjustments.

 

Kriengkrai has called for the government to heed the tripartite wage committee's guidelines, advocating for nuanced wage policies that consider skills rather than a blanket increase across all provinces.

 

The April TISI results were based on feedback from 1,268 entrepreneurs across 46 industries within the FTI's scope. The survey revealed that the global economy remains the top concern for 79.4% of respondents, followed by oil prices (56.6%), the domestic economy (56.4%), and domestic politics (40.2%).

 

Picture courtesy: sawasdee

 

-- 2024-05-16

 

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[hotchilli]

3 hours ago, webfact said:

Entrepreneurs are facing a barrage of challenges, including anticipated lower sales, production hurdles, and the financial ramifications of the government's policy shifts. Their anxieties chiefly stem from the proposed wage hike, rising domestic diesel prices, and increasing raw material costs.

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