NESDC flags challenges for manufacturing as Thai labour force shrinks by 3 million

According to NESDC’s long-term national development plan (2022-2037), labour shortages are expected to have an inevitable impact on Thailand’s industrial sector. The projections indicate a steady decline of more than 3 million working-age individuals every decade.

Data as of the end of 2023 shows that Thailand only has 40.7 million working-age people. However, the demand for labour is expected to surge, reaching 44.71 million by 2037 if current industrial trends persist.

To deal with the labour shortage, NESDC said businesses should start embracing automation as an alternative. It said that implementing automation could potentially boost productivity by 5% and reduce demand for more than 2 million workers.

However, despite the potential benefits, few businesses in Thailand have adopted automation, the NESDC said. Currently, only 5% of Thai industries have embraced Industry 4.0 practices, leaving a significant portion (85%) yet to integrate automation and robotics into their production processes.

NESDC also underscored the importance of supporting small and medium-sized enterprises (SMEs) in adopting automation to enhance productivity and competitiveness.

Noting that automation in production will be difficult to avoid in the future, NESDC also acknowledged the challenges this transition would pose to older people, especially those unfamiliar with technology.

Since a significant portion of the Thai workforce is nearing retirement age, NESDC is also pushing for the upskilling of workers to meet the needs of an evolving job market.

The Thai Social Situation Report, released in the 4th quarter of 2023, revealed a stark shortage of workers, especially those who hold a vocational certificate.

It also said that despite a surge in vacancies, there is a severe imbalance between job applicants and available positions.

In December 2023 alone, there were 179,000 positions available (up 19.20% compared to the previous year) and only 9,358 applicants or just 14 applicants for every 100 jobs.

This disparity has been widening since the outbreak of Covid-19, as per the labour demand statistics from the Department of Employment.