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Business closures up 38%, pandemic ‘scarring’ the economy

Caitlin Ashworth

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PHOTO: MGR Online

“The pandemic is scarring the economy, especially with the business closures and unemployment.”

The coronavirus pandemic has led to a spike in business closures in Thailand, increasing nearly 40% since last year, and those numbers are expected to continue to go up. Many of those businesses were in the tourism industry, a sector that has been crippled by the halt of international travel. With business closures, many lost their jobs, leading to the highest unemployment rate in the past 10 years.

From June to July, business closures went up by 38.4% compared to numbers the same time last year, according to the Economic Intelligence Centre. The EIC, which is a research house under Siam Commercial Bank, says they expect higher numbers in the 2nd half of the year due to the economic decline brought on by the pandemic. As of mid-August, 13,400 businesses had closed. The ratio of business closures increased by 37.9% year on year for the first 18 days of August, according to EIC.

Business closures grew an average of 38% for 2 and a half months and the number is expected to continue to grow for the second half of the year, according to first executive vice-president of EICYunyong Thaicharoen.

“We cannot predict the rate of business closures later this year because it requires analysis with updated data, but the rate is expected to be a double-digit increase.”

Hotels and other tourism businesses made up many of the closures, but Yunyong says many textile and automotive companies also closed down. With the business closures, many lost their jobs. The unemployment numbers had a nearly double digit increase during the second quarter in comparison with last year’s period. EIC says 745,000 workers in Thailand were reported as unemployed.

“The pandemic is scarring the economy, especially with the business closures and unemployment. With a vulnerable labour market, underemployed and furloughed workers could reach 3 to 5 million in the coming period.”

Meanwhile, Thailand’s unemployment rate hit a record high. In Q2, unemployment increased to 1.95%, the highest it has been since 2009, the EIC says (Thailand has historically recorded a very low unemployment rate).

Most unemployed people are people are in the 15 – 24 old demographic, many of them being graduates, according to Yunyong. The youth unemployment rate in the second quarter was 8.6%.

The highest unemployment rate is at hotels and restaurants with 2.9%. Construction followed with 2.8% and then electronics businesses at 2%. There are 84,000 people unemployed in hospitality and restaurant business in the second quarter. Other service businesses reported 91,000 people unemployed.

While some people lost their jobs during the pandemic, many people faced lower work hours. The EIC says weekly hours went from 40.7 hours, reported in the first quarter, to 38.1 hours on average in the second quarter. At the end of 2019, the average work hours were reported at 42.7 hours.

SOURCES: Bangkok Post | Chiang Rai Times

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8 Comments

8 Comments

  1. Avatar

    Toby Andrews

    Tuesday, September 15, 2020 at 12:38 pm

    Yes and these are only the registered business. Nok with her street stall will have gone and the stall was never registered.
    Unless the Thai people rise up and eject this present tyrannical corrupt government, some will soon be starving.
    Their future is fishing and farming. The jobs the Thais employed the Burmese and Cambodians to do. Jobs that Thais thought were too lowly for them. The dirty felang cannot help you.
    The dirty felang will not arrive and be subjected to the injustices the Thai government subject their citizens to.

    • Avatar

      Rinky Stingpiece

      Tuesday, September 15, 2020 at 2:54 pm

      are you permanently angry?

  2. Avatar

    John

    Tuesday, September 15, 2020 at 12:40 pm

    Don’t worry wise khun Prayut already have good idea;
    Cabinet mulls another long holiday to spur economy
    :)))

  3. Avatar

    lou

    Tuesday, September 15, 2020 at 3:11 pm

    so sorry, all those numbers feel fake, we are supposed only in our tourism industry to get 6 millions staff for the licensed ones….on the other hand some government offices admits madjory of biz by far are un registered, but 60 to 70% are closing down depending on areas… how many staff would you say are losing jobs ???? dont tell me 2 or 3%, my very small resort closed like most in Samui, making already 24 staff jobless, most opened ones reduced to 10 up to 20 % staff as partly opened only, we are taking already about 10 to 20.000 jobless only for hotels, not counting restaurants, bars, shops around.

  4. Avatar

    Derek Wellington

    Tuesday, September 15, 2020 at 3:37 pm

    Other service businesses reported 91,000 people unemployed.That must be the girly bar business? Well, i think that thailand need to change their direction.Understand how important tourism are for the people, and most they need to change the “making money out of everything from the tourists and expats.Now they have time to think about that for sure.Different prices is not OK! Same money,different person!! Good luck Thailand ,555

  5. Avatar

    Toby Andrews

    Tuesday, September 15, 2020 at 5:20 pm

    I’m even angrier when I have had a drink Rinky.

    lol

  6. Avatar

    Glenn

    Tuesday, September 15, 2020 at 7:14 pm

    my gf works at a BigC Superstore. since CV, staff has been reduced considerably. the more senior and higher paid workers were given severance pay and eliminated. in her department there previously were 10 staff, it’s now 3.

    out and about town in and around pattaya there are a LOT of for sale/for rent signs on the shop house fronts. also noticeably more street side food stands, tables, carts. not like there is a demand for more food, or that there are more people to buy. it is the locals trying whatever they can to generate some income.

    Thai people, remember who brought you all this un-enjoyment based on 99.95% of the population NOT ever getting sick and only 58 people dying in 8 1/2 months time – and they are still pushing fear. vote accordingly please.

  7. Avatar

    Ray W.

    Wednesday, September 16, 2020 at 3:26 am

    So you add this to the protracted boarder closures, the 22% increase in suicides, and you have to wonder was the response to covid worse then covid… the answer is yes BTW. But don’t worry we have another long weekend and 1200 tourist will be allowed in… as long as they are willing to be here for a 14 day quarantine, plus another 86 days and spend 833,333 bht in that time frame… super good plan.

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Caitlin Ashworth is a writer from the United States who has lived in Thailand since 2018. She graduated from the University of South Florida St. Petersburg with a bachelor’s degree in journalism and media studies in 2016. She was a reporter for the Daily Hampshire Gazette In Massachusetts. She also interned at the Richmond Times-Dispatch in Virginia and Sarasota Herald-Tribune in Florida.

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