Thailand manufacturing faces rising shutdowns in four key sectors

Thailand is experiencing a rapid increase in temporary factory shutdowns across four key manufacturing sectors: automotive parts, garments, rubber, and plastics. In June, the number of affected workers reached 18,998, representing a 58.08% increase from the previous month and an 18.61% increase year-on-year.

The automotive parts sector is facing a structural shift due to the rise of electric vehicles (EVs), which require significantly fewer components than traditional internal combustion engines. The garment industry is struggling with intense competition from low-cost imports, leading to capacity utilization dropping to approximately 49.06%. Meanwhile, the rubber and plastics industries are being hit by volatility in the Middle East, which has disrupted naphtha supplies and increased production costs by 30% to 50% for some manufacturers.

Many companies are utilizing Section 75 of the Labor Protection Act to implement temporary shutdowns while paying workers at least 75% of their wages. Industry leaders from the Federation of Thai Industries (FTI) and the SME Federation have warned that without government intervention—such as low-interest loans, debt restructuring, and business advisory services—these temporary measures may lead to permanent factory closures and a wave of bankruptcies.