Export value may miss year's target

Growth in the volume of export shipments is expected to slow to 9.7 per cent this year, the first time the figure would be in single digits in many decades, as many industries face a higher cost of labour and tougher competition from export rivals.

The total value of Thai exports will grow only 12 per cent, lower than the government's target, because of the higher cost of production, tougher global economic conditions, and rising protectionism, the Thai National Shippers' Council (TNSC) said yesterday.

"Although Thai exports achieved high expansion to 17 per cent last year, the impact from the global economic meltdown and the higher cost of production will cause a slowdown in exports this year. Exporters have to struggle to maintain their competitiveness due to many challenges this year," said TNSC chairman Paiboon Ponsuwanna.

The TNSC's export projection is lower than the government's official target to drive exports by 15 per cent to US$263 billion (Bt8.2 trillion) this year. Factors affecting exports include an expected slowdown in the European Union, higher labour costs, rising fuel prices, and the high cost of logistics. Some emerging nations such as Brazil and Argentina, which are newly targeted markets for Thai exports, will also raise more non-tariff barriers as those countries check for dumping of Thai goods.

The TNSC expects that the EU economy will slip into a serious recession in the fourth quarter of the year, which will cause a global slowdown and will affect expansion of the Thai economy.

GDP growth

It is feared that Thai gross domestic product may grow only 2-3 per cent this year, lower than the government's anticipated 4.5 per cent.

Paiboon added that an increase in the daily minimum wage to Bt300 would make it tougher for the Thai industry sector to compete.

Although some large companies and some industries will be able to adjust to higher production costs, many will lose their competitiveness because of higher labour costs, which will in turn affect the supply-chain industry and upstream manufacturers. Labour-intensive industries such as garments, furniture, toys and foods are at risk of losing competitiveness.

Paiboon added that the high logistics cost for Thai exporters had also created difficulties for a long time. He urged the government to focus its development plan on improving logistics efficiency.

In addition, a study by the TNSC, Chulalongkorn University and the International Institute for Trade and Development shows that the export price and volume indices recovered in December after falling considerably in October and November .

The TNSC study showed that the export performance index was up from 196.29 points in November to 213.17 points last month, after the industrial sector recovered from the floods' impact. The export quantity index increased from 268.56 points in November to 707.92 in December, while the export value index rose from 107.49 to 127.97 points last month.

The export performance index is projected to increase gradually in the following months as the industrial sector is expected to return to normal operation soon, Paiboon said.