Q2 unemployment rate rises in the midst of declining exports

Q2 unemployment rate rises in the midst of declining exports

Despite recent signs of economic recovery, the jobless rate continued to rise in the second quarter, leading overall non-farm sector employment to fall slightly from the first quarter.

According to the latest quarterly report by the National Economic and Social Development Board (NESDB), declining exports prompted many business owners to opt for employment suspension after failing to rein in non-labour costs.

The government's planning unit reported yesterday that the second-quarter unemployment rate was 1.08% of the total workforce, up from 0.97% in the first quarter and 0.88% from the year-earlier second quarter.

The total labour force in the second quarter stood at 38.2 million, down from 38.4 million in the same period last year and 38.3 million in the first quarter of this year.

Of the total labour force, 37.4 million people were employed during the period, down from 37.8 million in the second quarter year-on-year and 37.7 million in the first quarter.

According to the NESDB, employment in the agricultural sector declined for the sixth straight month in the second quarter, while employment in the non-agricultural sector increased by 1.4% as construction, transport and tourism added jobs.

NESDB secretary-general Porametee Vimolsiri said the agency is closely monitoring the employment situation, particularly in the manufacturing sector, which contracted for the 3rd straight month in the second quarter.

Mr Porametee said the export sector's tepid performance has led some entrepreneurs to cut their staff, with some having already submitted requests to the Labour Ministry, in accordance with Section 75 of the Labour Protection Act, requesting they be allowed to slash their employees' salaries in half.

In the second quarter, the agency reported 89 entrepreneurs with 40,226 employees had submitted such a request, mostly in central areas.

Mr Porametee said the manufacturing sector is expected to recover in the second half of this year in line with recovering exports, possibly in the third quarter.

The NESDB also trimmed its export projection this year to a 1.9% contraction from a 1.7% decline in the previous forecast. It predicted full-year GDP growth for Thailand of 3.0-3.5%.

The board reported that by the middle of this month, the country's GDP had risen by 3.5% year-on-year in the second quarter, up from 3.2% growth in the first.

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