Tuesday, October 28, 2008

Thailand's electrical exports may be static in 2009

NAREERAT WIRIYAPONG

Thailand's exports of electronics and electrical products next year may not pass this year's 1.6-trillion-baht projection as the European market nears a slowdown after the US market's collapse. Europe is now the leading destination of electronic goods and electrical appliances shipped from Thailand, consuming up to 17% of total exports.

The Association of Southeast Asian Nations (Asean) has become the second largest market (16% of exports), while the US has dropped from being the largest overseas market to ranking third (14-15% of exports), said Katiya Greigarn, chairman of the Electrical, Electronics and Allied Industry Club.

''Exports to Europe, especially air conditioners, have been doing well so far this year, prompting us to believe that overall shipments for the whole year have remained on track to grow by roughly 8-9%,'' said Mr Katiya.

''However, the market next year has remained uncertain, with financial turmoil taking its toll on Europe. If European demand falls, it is possible our exports will be flat next year.''

Last year, when electronics exports started to feel the impact of the US market's slowdown, the sector posted a growth of nearly 11% to 1.5 trillion baht.

In the third quarter of this year, the sector's export value rose 9% year-on-year, due to more orders placed for the high season of Christmas and the New Year, he said.

Hard disk-drives (HDD) _ the top electronic export item _ have posted a 10% increase in exports so far this year, compared with an average annual growth of 20% over recent years.

But shipments of integrated circuits (IC) have fallen by 10%, mainly due to the US slowdown. Sales in the US constituted as much as 20% of Thai electronics exports two years ago.

About 85% of Thailand's output of electronic and electrical goods is exported, said Mr Katiya. He added that the industry employed 500,000 people and its workforce has been rising by an average of 30,000 to 40,000 annually.

He forecast that the gloomy outlook could now lead manufacturers to trim costs by cutting overtime. But he discounted the possibility of massive layoffs.

''As of today, if we are forced to cut production, I think the number of staff likely to lose their jobs is only marginal,'' he said.

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