Steel and internal combustion engine (ICE)-related industries are expected to stagnate this year, says the Federation of Thai Industries (FTI).
In addition, tourism is not expected to fully recover to 2019 levels, said Kriengkrai Thiennukul, chairman of the FTI.
"We are monitoring the economic situation in 2024 and how it will affect the manufacturing sector. We need to start considering measures to support certain industries," he said.
The steel and iron industry has turned sluggish as state construction projects slow down, following a delay in budget planning in fiscal 2024, which started on Oct 1 last year.
The lengthy process forming a new coalition government is blamed for causing the delay.
Mr Kriengkrai said steel manufacturers want the government to speed up budget spending to support infrastructure construction projects, which will help boost the economy.
The dumping of cheap steel imported from China and neighbouring countries is another issue that must be solved as it deals a blow to the local steel industry.
Capacity utilisation in the steel industry is low.
In the automotive industry, Thailand will see more investment in electric vehicle (EV) production facilities as the government continues to grow the industry under a new EV incentive package, dubbed EV3.5.
This will affect manufacturers of ICE cars and their auto parts. The number of ICE vehicles is expected to decline as EV manufacturing expands, said Mr Kriengkrai.
If auto parts makers cannot adjust to the change, they will bear the brunt.
According to the FTI, there are around 1,700 local auto parts companies. Most of them are small and medium-sized original equipment manufacturers, categorised as tier 2 and tier 3 in the auto parts supply chain.
Auto parts producers in tier 1 are usually subsidiaries of global car companies.
The FTI is working with carmakers in Japan, Europe, the US and China to help car parts manufacturers transform their ICE-related technology into one that suits EVs.