Govt urged to help SMEs struggling with rising operating costs
Dhurakij Pundit University Research Centre (DPURC) is calling on the government to step in because its study on the impact of the Bt300 wage hike in seven pilot provinces has shown that 87.5 per cent of the sampled SMEs are badly affected and about 80,000 of them face closure.Dr Kiatanantha Lounkaew, director of the research centre, said most SMEs were able to adjust with the wage hike, but if the government continued increasing their burden by raising the cost of energy and causing political uncertainty, then as many as 130,000 SMEs will be severely hurt.
The wage hike, imposed in April, is also threatening to throw some SMEs out of the market. He suggested that before the wage hike goes nationwide in January, the government should have officials listen to SMEs' problems in each sector.
DPURC has spoken to 683 SMEs about the impact of the wage hike in the seven pilot provinces, namely Bangkok, Nonthaburi, Samut Prakan, Samut Sakhon, Nakhon Pathom, Phuket and Pathum Thani. Of the respondents, around 87.5 per cent said the policy was hurting them, and though 73.2 per cent of them said they were able to deal with the problem in the first 100 days, 14.3 per cent said they were struggling with the rising production costs. The research centre said it was this latter group that needed immediate help.
Meanwhile, since April, the overall business operation costs in the seven provinces rose 16.9 per cent on average. Individually, production costs in Samut Sakhon rose 20.8 per cent, Bangkok 17.4 per cent, Pathum Thani 16.7 per cent, Samut Prakan 16.2 per cent, Nakhon Pathom 15.8 per cent, Phuket 15.2 and Nonthaburi 14.4 per cent. The wage hike increased SMEs' cost by 7.6 per cent and the rise in energy has spiked it further by 2 per cent. Of the seven pilot provinces, Samut Sakhon has suffered the most with its operation costs jumping to 9.4 per cent.
In order to deal with the wage hike, 47.8 per cent of the SMEs have raised the price of their products, 36 per cent have reduced their staff, 26 per cent have cancelled employee welfare, 19.4 per cent have outsourced the work and 17.9 per cent have replaced human staff with machines.