NESDC outlines social situation in Q3/2019

However, there were still some major issues requiring close monitoring. including a decline in employment, an increase in alcoholic beverage and cigarette expenditures, and an increase in criminal cases due to increasing narcotic usage.

Little impact on labour market

In Q3/2019, the employment decreased by 2.1 per cent year-over-year. Employment in agricultural sector decreased by 1.8 per cent which was a continuous decline for the third quarter from inclement weather.
Employment in non-agricultural sectors also decreased by 2.3 per cent due to the economic slowdown and the decline of exports.
Economic sectors that recorded lower employments included manufacturing sector, wholesale/retail and construction, down by 5.2, 4.1, and 2.2 per cent respectively.
Meanwhile, employments in hotel/restaurant and transportation/storage sectors increased by 3.1 and 1 per cent respectively as a result of the higher number of tourists.
Overall labor wages slightly increased to Bt14,334/month while the average wage for private sector was equal to Bt12,847/month, accounting for increases of 1.8 and 2.5 per cent respectively.
When deducting inflation at 0.6 per cent, the real wages of the private sector increased by 1.9 per cent. Labour productivity (Gross domestic product per worker) had a value of Bt69,329 per person, an increase of 4.6 per cent.
Meanwhile, the unemployment rate stood at 1.04 per cent or 0.394 million people, slightly increased by 5.5 per cent year-over-year.
The increase was mainly attributed to the economic slowdown and inclement weather.
Unemployment increased for those who have worked before and those who have never worked, by 8.4 and 3 per cent respectively, partly due to the season when new graduates entered the labour market.
When considering unemployment according to education level, it was found that those who completed bachelor degree had the highest unemployment rate at 2.15 per cent, followed by vocational graduates, high vocational graduates, lower secondary school graduates, upper secondary school graduates, and primary school or lower graduates.
The employment trends in Q4/2019 show that the economic slowdown has not shown much impact on the labour market. By looking at the Labour Force Survey in October 2019, the unemployment rate is still low at 0.9 per cent or equivalent to 0.355 million unemployed.
Although the total labour force and employment decreased by 1.7 and 1.6 per cent respectively, it was because they were those moving out of the labor force, especially the elderly and houseworkers who enter the labor force occasionally.
It was found that there were 19.2 million people who were outside the labour force and it was increased by 5.1 per cent.
In addition, the structure of the Thai labour market is flexible, with workers who are laid off in the formal system able to easily move to work in the informal sector, especially by moving to the agricultural sector.
However, there are signs of effects of the economic slowdown which must be followed up closely:
1. The number of unemployment benefit applicants has continuously increased. At the end of Q3/2019, they accounted for 1.72 hundred thousand persons or 1.5 per cent of the total number of insured persons under Section 33, the highest since the economic crisis in 2009 which recorded 2.2 per cent of all insured persons.
2. Domestic and foreign orders declined. The business index in domestic orders declined continuously for the 11th consecutive month while foreign orders continued to decrease for the sixth quarter, which may affect employment in the export-goods manufacturing industry.
3. A reduction of working overtime: the number of employed persons over 50 hours decreased by 7.9 per cent in Q3/2019 which is a continuous decline since Q4/2016 onwards.
4. Firms requesting to use Section 75 in accordance with the 1998 Labour Protection Act, as amended 2008 (as a measure that allows companies to temporarily stop work by paying a minimum wage to employees more than 75 percent of wages): By Q3/2019, there were 48,015 affected workers from 93 firms nationwide, divided into 21,297 people who were affected by partial business closures and 26,718 people who were affected by complete business closures.

Issues in focus

1. Closely monitoring the employment termination situation and monitoring of workers receiving compensation for termination of employment as specified by law. Affected workers should be facilitated such as organising labour markets, promoting job applications and job opportunities.

2. Implementing measures to alleviate the effects that may occur on labor such as:
• Asking for cooperation from firms in order to delay layoffs, such as reducing working hours/days, or pausing firm operations in accordance with Article 75. Voluntary resignation with employment termination should be the last resort.

Household debt

Total household debt in Q2/2019 amounted to Bt13.08 trillion, expanding by 5.8 per cent, which decelerated from 6.3 per cent in the previous quarter. It accounted for 78.7 per cent of the GDP due to the economy in Q2 decelerating faster than household debt.
When considered by each category, it was found that housing loans grew by 7.8 per cent, decelerated from 9.1 percent in the previous quarter. Likewise, loans for automobiles slowed down by 10.2 percent from 11.4 percent.
Loans for other personal consumption increased continually, grew by 11.8 per cent compared to 11.3 per cent in the previous quarter as a result of the expansion of both credit card loans and other personal loans.
The overall credit quality is within the surveillance criteria since many credit types have increased risks. The non-performing loan (NPL) outstanding amount of commercial banks in the Q3/2019 was Bt133,254 million, an increase of 12.2 per cent from the same period last year, representing 2.81 per cent of total loans.
The NPL ratio of housing loans stood at 3.49 per cent, up from 3.34 per cent in the previous quarter. For car loans, the NPL ratio increased to 1.86 per cent from 1.82 per cent in the previous quarter.
NPL ratio of credit card loans was 2.65 per cent compared to 2.48 per cent in the previous quarter while the NPL ratio of other personal loans stood at 2.36 per cent, down from 2.42 per cent.