Kasikorn Research Centre reports that factories remain at risk of closure in 2025. In 2024, despite more openings than closures, an average of more than 100 factories per month shut down for the second consecutive year.
The overall outlook remains
negative, as seen in the past two years (2023-2024). The net increase in new factories, after deducting closures, has dropped to 52 per month, down from 127 per month in 2022-2023.
Industries most affected by closures in 2024 include those facing structural production issues, declining demand, and intense competition, such as furniture, electronics, apparel, automotive, and steel. Both small and large factories in these sectors have shut down, aligning with a continued decline in their production indices.
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Small and medium-sized enterprises (SMEs) have been hit hardest, with total registered capital of closed factories in 2024 standing at 47.83 billion baht, 3.8 times lower than in 2023, reflecting persistent challenges for small manufacturers.
On the positive side, newly opened factories continue to absorb labour, preventing a severe employment crisis. However, working hours in manufacturing are declining, impacting workers’ incomes.
In 2024, new factories hired an average of 36 workers per facility, higher than the 28 workers per factory affected by closures. However, the impact varies by industry, business size, and location.
Thailand’s Industrial Production Index (IPI) has been in decline for nine consecutive quarters, with Q4 2024 contracting by 2.0% year over year. Rebuilding competitiveness will require structural adjustments, which won’t be easy.
Source: The Nation
