The Powerhouses Of Growth In Thailand’s Top 5 Industries

From leading automotive and electronic sectors to glittering gem and jewellery exports, Thailand’s top 5 industries are key players in its economic success.

Thailand’s economic landscape is a dynamic tapestry woven by diverse industries that propel its growth on the global stage. From leading automotive and electronic sectors to glittering gem and jewellery exports, Thailand’s top 5 industries are key players in its economic success. This article explores Thailand’s top five industries, delving into their contributions, challenges, and impact on the country’s economic landscape.

Thailand’s Top 5 Industries

Agriculture, Forestry and Fishing

Since the 1960s, agricultural advancements have underpinned Thailand’s shift to an industrialized economy. While agriculture once constituted 70% of employment in 1980, its contribution to GDP stood at 8.4% in 2008. Rice, historically a leading global export, faces competition from India and Vietnam. Thailand is a significant exporter of shrimp and boasts diverse crops, including coconuts, corn, rubber, soybeans, sugarcane, and tapioca. As the world’s third-largest seafood exporter, Thailand’s fishing industry employs over 300,000 people, with fish exports valued at approximately $3 billion in 2014.
Thailand holds the position of the world’s second-largest gypsum exporter, trailing only behind Canada. However, governmental regulations restrict gypsum exports to stabilize prices. In 2003, Thailand’s mineral production encompassed over 40 different minerals, amounting to an annual value of approximately US$740 million.

Industry and Manufacturing

In 2007, the industrial sector played a substantial role in Thailand’s economy, contributing 43.9% to the Gross Domestic Product (GDP) and employing 14% of the workforce. Over the period from 1995 to 2005, the industry demonstrated consistent growth, with an average annual expansion rate of 3.4%. Manufacturing stands out as the pivotal sub-sector, constituting 34.5% of the GDP in 2004. This underscores the significant impact of the manufacturing industry on Thailand’s economic landscape.

Thailand’s primary export sector is electrical and electronics (E&E) equipment, constituting approximately 15% of total exports, with E&E exports reaching US$55 billion in 2014. In 2015, the E&E sector employed around 780,000 workers, accounting for 12.2% of manufacturing employment. By 2020, Thailand emerged as the leading ASEAN exporter of computers and computer components and the world’s second-largest producer of hard disk drives (HDDs) after China. However, challenges loom for the high-tech sector, as demonstrated by a prolonged manufacturing index decline and the relocation of manufacturers to countries with lower labour costs. Notably, an LG Electronics factory in Rayong Province ceased production in April 2015, relocating operations to Vietnam, where daily labour costs are significantly lower than in Thailand. Samsung Electronics Co. Ltd. also plans to establish two large smartphone factories in Vietnam, reflecting a trend of manufacturers seeking cost-effective alternatives beyond Thailand.

Automotive

Thailand stands at the forefront of automotive production and sales within the ASEAN region. In 2015, the automotive sector employed around 417,000 workers, making up 6.5% of total employment in manufacturing and contributing approximately 10% to the country’s GDP. Notably, in 2014, Thailand exported automotive goods worth US$25.8 billion. However, the sector faces a notable challenge, with as many as 73% of its workforce at a high risk of job displacement due to automation. This underscores the transformative impact of automation on the automotive industry in Thailand, necessitating strategic considerations for workforce adaptation and economic resilience.

Gems and Jewellery

Thailand ranks gem and jewellery exports as its third-largest export category by value, following automotive and computer components. In 2019, the export value of gems and jewellery, including gold, surpassed US$15.7 billion, marking a significant 30.3% increase from the previous year (486 billion baht, up 26.6%). Key export destinations encompass ASEAN, India, the Middle East, and Hong Kong. The gem and jewellery industry plays a substantial role in employment, with more than 700,000 workers engaged in the sector, as reported by the Gem and Jewelry Institute of Thailand. This underlines the industry’s economic significance and its substantial contribution to the country’s export revenue and employment opportunities.