FTI warns of supply side disruption

FTI warns of supply side disruption

Covid cases impede industrial output

A large group of workers rally at a garment factory in Pak Kret district of Nonthaburi on June 29, 2021 after the management refused to suspend operations for cleaning following confirmation that at least 72 workers there had contracted Covid-19. (Photo: Pornprom Satrabhaya)
A large group of workers rally at a garment factory in Pak Kret district of Nonthaburi on June 29, 2021 after the management refused to suspend operations for cleaning following confirmation that at least 72 workers there had contracted Covid-19. (Photo: Pornprom Satrabhaya)

Soaring Covid-19 infections spreading into the industrial sector could lead to scarcity of domestic goods, hurting consumers already smarting from weaker purchasing power, warns the Federation of Thai Industries (FTI).

The FTI raised the alarm after earlier warning about the impact on the export sector if the virus continues to cause more infections among factory workers.

If infection rates, now hovering around 14,000 new cases a day, and the emergence of more Covid-19 clusters in factories continue until mid-August, Thailand can hardly avoid the impact of "supply side disruptions", said FTI vice-chairman Kriengkrai Thiennukul.

There may be a shortage of some products, while the export sector will certainly be affected, he said.

This may make it difficult for people to afford products and services, said Mr Kriengkrai.

"So far Thailand has only encountered problems on the demand side," he said, referring to lower demand for goods due to weaker purchasing power.

During the first and second waves of Covid-19, the country avoided the goods shortages that affected some countries.

In the throes of the third outbreak, which flared up in April, the supply of goods may become a problem, said Mr Kriengkrai.

"We saw new infection clusters in a chicken processing factory, a stainless product factory and an auto parts plant," he said.

"Manufacturers already have their guard up, but if high daily infection rates continue, the virus will find its way to factories."

The government's lockdown measures in 13 provinces including Bangkok, which will remain in place until Aug 2, have yet to cause significant impact on the manufacturing sector, but entrepreneurs face higher operation costs and logistics problems, said Mr Kriengkrai.

More than 30,000 factory workers were not allowed to travel to work in Chachoengsao after infections were detected in an auto parts factory.

The FTI eventually negotiated with officials to relax travel restrictions to allow the workers to reach the factory.

If the government lifts the lockdown but Covid-19 continues to afflict the public health system, the end result will be no different than a lockdown because many economic activities will stop, he said.

"The government must concentrate and solve problems by vaccinating people and conducting Covid-19 tests," said Mr Kriengkrai.

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