Thai manufacturing more cost-competitive: Cushman & Wakefield
Thailand rose three spots to fifth place for manufacturing cost competitiveness, according to U.S.-based consultancy Cushman & Wakefield’s annual Global Manufacturing Risk Index, which examined 47 countries in Europe, the Americas and Asia-Pacific.
“The Thai manufacturing sector has expanded in 2021 on improved domestic demand, a rapidly growing e-commerce sector, recovery of world trade volumes, and government-driven growth from budget disbursements and economic stimulus measures,” said Gareth Michael Powell, Senior Director at Cushman & Wakefield, Thailand.
The company concluded that Thailand’s cost profile has improved. That propelled the Kingdom to fifth place from eighth, the report noted.
That is good news for Thailand’s manufacturing sector. While it means that importers can buy Thai goods at lower prices, it also means that it buys time for Thailand to achieve its economic transformation.
Cost competitiveness is always on the minds of purchasers, and for decades Thailand’s economy has achieved success as a center for low-cost but high-quality manufacturing. However, as other countries have begun to develop more rapidly, that lower-cost niche is becoming more crowded.
And as living standards have risen in Thailand, it has been less easy to compete on manufacturing costs. In response, Thailand has adopted a 20-year national strategy to evolve its economy and society into ones based more on research and development, innovation and creativity.
As that evolution is well underway, Cushman & Wakefield’s report is evident that the Kingdom has found a way to chart a middle course: raising quality and embracing higher technology while also holding prices to competitive levels.
That could prove to be a winning formula for Thailand.