Skilled labour shortage on the Eastern Seaboard

Although Thailand’s overall unemployment rate averaged 0.7 percent in 2013 and is expected to rise to between 1.2 and 1.3 percent over the next 12 months or so, a survey conducted along the important Eastern Seaboard has found a skilled labour shortage.

The Eastern Institute of Vocational Education (EIVE) conducted a survey in the Eastern Seaboard provinces (which consist of Chonburi, Rayong, Chachoengsao, and Samut Prakan) and found a number of factories complaining about a lack of skilled labour.

EIVE produces about 1,000 graduates a year from its nine vocational colleges, but demand exceeds supply by a ratio of four to one.

The Eastern Seaboard is the centre of export-oriented industries, with the port of Laem Chabang being the focal point for shipping industries while Rayong has a large manufacturing sector.

It is this region which produces one of Thailand’s key export products: Japanese automobiles. The motor vehicle industry has been a major player in the Thai economy for some time now, with further growth expected in coming years.

Across the four provinces are a number of large industrial estates, all of which continue to expand year-on-year, even though the current political crisis has caused a general slowdown.

One of the consequences of the political turmoil has been the freezing of the proposed two trillion baht infrastructure development plan by the Constitutional Court. While concerns over accountability and transparency were major factors in the freezing of the plan, the general consensus within business was that something of this nature is indeed required if Thailand is to remain as competitive as it has been in the past.

While Thailand’s unskilled labour force is vast, the demand for skilled labour, as noted by EIVE, is rising faster than vocational colleges can keep up. According to Tanit Sorat, the vice-chairman of the macro-economic, finance and fiscal team at the National Economic and Social Advisory Council, some 400,000 people graduate each year from vocational institutions. With unemployment expected to rise beyond the one percent mark this year if the political crisis continues, Tanit sees problems for many of these graduates in seeking employment.

However, the reality should be that as long as the manufacturing sector on the Eastern Seaboard remains as strong as it currently is, then skilled labour will always be in demand and the 400,000 graduates should have little trouble gaining employment.

The big concern, according to the Thailand Development Research Institute (TDRI) is that the longer the political crisis continues, the more investors delay making firm decisions on expansion. Indeed, there is a concern that many will start to look elsewhere in the region to establish their businesses.