Thailand’s business landscape is facing stormy skies as nearly 4,000 companies shut their doors in just the first four months of 2025 — an 8.3% increase from the previous year, according to the Department of Business Development (DBD) .
Despite 30,148 new businesses launching during the same period, registered capital from closures totaled nearly 16 billion baht, signaling deeper structural issues.
Key Factors Fueling the Shutdowns
1. Weak Consumer Spending
Retail and wholesale sectors, especially in provincial areas, are experiencing a downturn. Customers have cut their spending on all products by 15-30%, focusing primarily on essentials. This has impacted more than 400,000 small shops nationwide, leading to a chain reaction of business closures due to declining purchasing power, rising costs, and intense competition .
2. Influx of Cheap Imports
Thailand has recorded a 20% drop in low-quality imports, mostly from China, since introducing steps to curb cheap Chinese imports that were hurting business in Southeast Asia’s second-largest economy . Despite these efforts, the measures may have been too late for some businesses, such as Ben’s Socks, which experienced an 80% decline in sales.
3. Rising Operating Costs
High production costs, including energy, transportation, and interest rates, are raising concerns that more closures may follow. The Federation of Thai Industries (FTI) is urging the government to implement additional measures to support business operators .
4. Regulatory and Technological Challenges
Businesses not adapting to digital technology and global trends are under threat of closure. The automobile, electrical appliances, and electronics industries are particularly at risk due to their delayed transition to digital technology and response to global trends .
Impact on Employment and the Economy
The manufacturing sector is facing a growing crisis, with factory closures accelerating across the country. For the past two years, an average of at least 100 businesses have shuttered their doors each month, according to data from the Kasikorn Research Center (KResearch). This trend shows no sign of abating, with forecasts suggesting closures will continue throughout 2025, impacting businesses of all sizes .
However, the services sector, notably tourism, has absorbed much of the workforce, increasing employment from 87% to 99% in the second quarter. There is a growing demand for specialized roles such as spa therapists, tour guides, and chefs .
Business Closures by Sector (2024)
| Sector | Number of Closures | Key Issues |
|---|---|---|
| Steel & Metal | High | High production costs, cheap imports |
| Retail & Wholesale | Over 400,000 shops | Declining purchasing power, intense competition |
| Manufacturing | 561 factories | Rising costs, technological lag |
| Services (Tourism) | Absorbing workforce | Increased demand for specialized roles |
Conclusion
Thailand’s economic landscape is undergoing significant shifts, with a notable increase in business closures across various sectors. While challenges such as declining consumer spending, influx of cheap imports, rising operating costs, and technological adaptation persist, there is a silver lining in the resilience of the services sector, particularly tourism, which is absorbing a significant portion of the displaced workforce. Strategic government interventions and business adaptability will be crucial in navigating these turbulent times and fostering a more robust economic recovery.