Widespread unemployment is expected in the industrial sector this year as the economy braces for continued fallout from the coronavirus outbreak, just as over 500,000 new graduates leave university this May, says the Employers' Confederation of Thai Trade and Industry (EconThai).
The group is raising concerns about the possibility that many graduates will not be able to find work, as some domestic companies are considering layoffs.
"This year will likely be difficult for many industries, employers, employees and businesses around the globe," said Tanit Sorat, vice-chairman of EconThai. "The outbreak has been emotionally challenging for companies, since business as usual is not an option."
Thailand's labour market employs about 38 million people. Since last year, many companies have been delaying hiring new employees.
Some sectors, like retail and finance, have laid off staff.
EconThai expects the unemployment rate in 2020 to reach 3%, up from the current 1%.
Mr Tanit said that if the virus outbreak does not end soon, there will be no economic growth and very few new employees hired, especially among new graduates.
On top of that, drought conditions this year are the worst in a decade and will seriously hurt the agricultural sector.
"In Thailand there is much labour overlap between the agricultural and industrial sectors," Mr Tanit said. "During the rainy and harvest seasons, workers from the industrial sector will move to work in the agricultural sector."
The agricultural sector employs 27.3% of workers in Thailand, followed by retail and wholesale (17.2%), industry (16.9%), tourism (8.1%), construction (6.5%) and logistics (3.7%).
Mr Tanit said the tourism and export sectors drive domestic economic growth and both sectors are weak.
EconThai is calling on the government to implement fresh measures to create new jobs in the provinces to support labour in the agricultural sector, suspend repayment for businesses and speed up budget disbursement for this fiscal year.
"The government should fix the new regulation for the Subdistrict Administration Organization that will allow about 77,000 organisations to employ new graduates leaving university this May, even as part-time workers, as it will help them contribute to the local economy," Mr Tanit said.