The weak global economy has led to declining orders from overseas importers, forcing Thai industries to cut their production capacity and overtime payments to employees, reports the Employers' Confederation of Thai Trade and Industry (EconThai).
The drop in worker income has put more pressure on already weak domestic purchasing power, it said.
EconThai's survey showed overtime payments in the first half of this year dropped by 21.1% because of lower production capacity, which fell to 55%. Production capacity for small and medium-sized enterprises fell to 48% in the first half.
Tanit Sorat, EconThai's vice-president, said the weak global economy was continuing to hurt Thai business according to the survey of 11 business clusters, including electronics and automotive, which employ millions of Thais.
"There are no new orders from overseas markets and the domestic economy is still sleepy. Businesses have to cut their production capacity and costs in order to survive," he said.
Mr Tanit said the revenue outlook for Thai business dropped to 7.22% in the first half of this year, according to the survey of 46 industries.
The survey forecast that the Thai economy will remain weak, with key indicators such as industrial production capacity remaining flat in the second half as there are no positive signs implying growth for exports or domestic demand.
The Federation of Thai Industries just announced it would cut its economic forecast for the fourth time this year, expecting exports to contract over 2% this year.
"We estimate exports in the second half will contract by up to 5% as major trade partners such as China are still in an economic rut," said Mr Tanit.