Some 45% of goods producers will have hiked prices by year-end: UTCC

More than one-fourth of enterprises have already increased their goods prices to offset rising labour costs, while another 20 per cent plan to do so by the end of the year due to wage costs and the higher price of liquefied petroleum gas (LPG).

These are the main results of a survey conducted by the University of the Thai Chamber of Commerce (UTCC) on 800 manufacturing businesses during August 25-31.

“Enterprises are facing lower profits and incomes. They have to adapt to higher production costs by increasing prices, or downsize the quantity of goods [per package] to ensure their income,” Thanavath Phonvichai, director of the UTCC’s Economic and Business Forecasting Centre, said yesterday.

He pointed out that most companies had not, however, laid off employees, partly out of concern over their ability to engage workers again amid the current labour shortage.

The poll showed that 25.2 per cent of enterprises had increased goods prices during the past eight months, that is, since the Bt300 minimum wage was implemented nationwide. 

Almost 20 per cent of businesses are planning to increase retail prices in the remaining months of the year. 

More than 28 per cent have downsized the volume of goods supplied, but have not increased prices, while 27 per cent have no intention of changing prices this year.

Some 73 per cent of the companies surveyed stated they had not benefited or been helped by the government’s remedial measures related to the minimum-wage hike, said Thanavath.

Meanwhile, about 25 per cent of restaurant, food trader and hotel respondents said they would soon increase food prices following the rise in the price of LPG. 

Other 26 per cent are waiting to see the impact of slower economic growth on demand and consumption before deciding whether to increase food prices this year. 

 

20% to maintain prices 

Twenty per cent said they would maintain their prices despite the LPG price hike, while another 25 per cent intend reducing the quantity of food supplied instead.

Thanavath said the rise in production costs meant many businesses would need to increase prices in order to ensure their incomes. However, amidst the economic slowdown, they may not do so this year, delaying such a move until 2014, when many goods and food prices can be expected to increase. 

As a result, inflation next year will rise beyond 3.5 per cent, he added.

In a move aimed at tackling the shortage of labour, the Thai Chamber of Commerce will propose to the government and private enterprises that the retirement age be increased from 60 to 65 years.

Bhumindr Harinsut, vice chairman of the chamber, said the proposal would be discussed by the standing joint private committee and government agencies soon. 

The chamber will also propose that the government sign a memorandum of understanding with fellow Asean member states over an exchange of workers, in order to increase the labour supply in the Kingdom, he said.

Thanavath said without plans to solve the labour shortage, Thailand could become a net-import country in the near future. 

Investors and manufacturers would shift to investing overseas and the country would increasingly have to rely on goods and food imports, he warned. The chamber estimates that the nation currently faces a shortage of about 1 million workers.

In addition, Bhumindr called on politicians and all parties to discuss their plans with business people before launching any populist campaigns in future elections.

He said such campaigns had resulted in a huge impact on both the private sector and consumers, and that politicians must weigh carefully the positive and negative effects of each populist measure. For instance, the Bt300 minimum-wage measure has had a huge impact on the business sector, and consumers are also suffering due to enterprises having to increase their retail prices.