Factory closures drive surge in services sector employment
The majority of more than 300,000 laid-off industrial workers from recent factory closures are flocking to the services sector, particularly the hospitality industry, according to the Tourism Industry Council of Thailand's most recent Tourism Confidence Index report.
According to the data, 561 factories were closed during the first five months of this year. Still, more than 3,573 factories closed between January 2011 and May 2024, resulting in the loss of more than 300,000 jobs.
Fortunately, more than half of them have been able to rejoin the labour force.
The council report showed that the employment statement of hotel and tourism entrepreneurs in the second quarter of this year increased from 87% in the previous quarter to 99%. The surge is due to the tourism industry's return to normal, which has resulted in a significant increase in demand for employees.
The demand was unintentionally consistent with the closure of various manufacturing and industrial facilities as a result of weaker exports. As a result, more than 300,000 industrial unemployment claims were absorbed by the service sector, keeping the national unemployment rate at around 100,000.
Meanwhile, the exponential growth of the service sector enticed more than 500,000 new graduates to join.
The phenomenon reflects a significant transfer of labour from the industrial sector to the service sector. As a result, the tourism industry sector does not face a labour shortage.
However, there is a scarcity of qualified workers with specific skills, such as massage/spa therapists, tour guides, professional chefs, kitchen staff, and hotel receptionists. All of these positions require more specialised skills than general workers.
