Higher growth in garment exports seen as EU recovers
March 29, 2014 00:00 By Petchanet Pratruangkrai
Growth in garment exports is expected at 5 per cent this year, to US$7.8 billion (Bt250 billion), thanks to clearer signs of global economic recovery, especially in the European Union.
That prediction is based on export growth of 3.61 per cent in 2013 to $7.48 billion and a weaker baht estimated at between 31-33 against the US dollar.
After opening the “31st Export Garment Fair” in Bangkok, Duangkamol Jiambutr, deputy director-general of the International Trade Promotion Department, said the garment sector was one of the export industries that would continue to show strong growth this year as companies in the sector had constantly focused on product and design development. Duangkamol said companies had also emphasised cost management amid grave concerns over higher production expenses.
“Thai garment manufacturers have prepared well for changing factors such as the increased cost of labour and raw materials by investing in other countries and focusing more on design and innovation,” she said. “The industry will this year show brighter growth with an expectation of at least 5-per-cent expansion in overseas trading.”
Duangkamol said economic recovery in many countries would also increase demand for imported apparel from Thailand.
Sukij Kongpiyacharn, president of the Thai Garment Manufacturers Association, said the garment manufacturing and export sector had not been affected by the internal political problem. However, he said sales in the domestic market had declined because of lower consumer confidence. As a result, garment manufacturers had focused more on the export market this year.
To diversify markets and ensure smooth operations, Sukij said about 20 Thai garment manufacturers had expanded their plants in neighbouring countries a few years ago.
He said manufacturers should be able to handle the fallout from domestic issues as they have long-term plans under the Asean Economic Community to ensure growth. But some small and medium-sized enterprises might be affected by lower sales in the domestic market.
With sign of an economic recovery in the EU, the third-largest market for Thai garments, Sukij said more orders would be seen this year as European consumers would have more confidence to spend.
The association also expects that once the Thai-EU Free Trade Agreement is inked it will result in more exports to the EU.
Meanwhile, the Commerce Ministry advised Thai enterprises to adapt urgently to the high standards and new regulations in the EU markets since doing so will help ensure more shipments from Thailand.
Srirat Rastapana, the ministry’s permanent secretary, said market-monitoring agencies had found that the EU economy had shown clearer signs of recovery.
She said companies should take the opportunity to penetrate European markets, while concentrating more on meeting the standards the EU requires for imported goods.
“The EU market has high purchasing power,” she said. “With its recovering signs, Thais need to be aware of new trade rules and some tariff barriers, such as policies concerning corporate social responsibility and environment protection, so that they will enjoy export growth to the EU market.”
The Commerce Ministry has targeted increasing export growth to the EU by 5 per cent this year, against only 2.6-per-cent expansion in 2013.