Electrical and electronic industry risks negative growth rate due to slow recovery

The electrical and electronic industry stands a chance of facing a negative growth rate this year if more than 50% of its flooded factories fail to recover by the second quarter of this year.

Director of the Electrical and Electronics Insitute Somboon Hortrakoon said that the institute held a discussion with manufacturers to assess the sector’s post-flood manufacturing capacity. Approximately 700 factories were submerged under floodwater. They included 200 factories in industrial estates and 400-500 others situated outside. At present, only 30% of the flooded factories have resumed operation.

He pointed out that at this stage, it is still difficult to determine the pace of the industry’s recovery. If more than 50% of the flooded factories are able to recover by the second quarter of the year, then the electrical and electronic industry would see a growth rate of around 5-6%. However, if the target is not achieved, the industry’s growth rate would drop to minus 5%. This means the country would lose THB79.5 billion in trade opportunities. In 2011, the Thai export value stood at USD53 billion, or around THB1.59 trillion.

Mr. Somboon indicated that the slow recovery is partly due to negotiations with insurance companies and machinery imports from abroad. He added that the majority of entrepreneurs still lack confidence in the water management plan. Meanwhile, the construction of floodwalls around industrial estates only benefits businesses located inside the area. He pointed out that factories established outside of industrial estates also require financial aid to recover. Moreover, the minimum wage hike to 300 baht per day has added to the concerns of electrical and electronic entrepreneurs as the industry currently has 550,000 employees and many factories are still in the process of post-flood recovery.

Source: http://thainews.prd.go.th/en/news.php?id=255502230012

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