Apart from intensifying competition, higher expenses and raw material shortages, as well as the problem of unlicensed copies that have affected the competitiveness of the Thai furniture industry in 2009, the industry also faces negative factors from decelerating consumer purchasing power due to the economic crisis.
It is projected that 2009 will be the most serious economic slump since World War II, with particularly severe recessions in the key markets of the USA, Japan and EU that normally accept an aggregate import value of furniture and parts accounting for 70-80 percent of the total import value of the global market. KASIKORN RESEARCH CENTER (KResearch) expects that Thai furniture and parts in both domestic and overseas markets will continue to slow from last year. Total spending on furniture and home decoration items will likely not grow over 5 percent (at constant prices), which would be slower than the 5.6 percent growth (at constant prices) achieved in 2008.
As for the export trend, it is expected that if the economies of Thailand's trading partners would fall more seriously than projected, that may cause our exports of Thai furniture and parts to contract by 10-15 percent, which would be a further deterioration from the 8.4 percent contraction of 2008. However, if the economic stimuli of Thailand's trade partners improve their economies within 2H09, the above Thai export category may perform at a -5 to 0 percent change YoY (where the export value might not vary much from 2008.) In such a case, new markets will be a supporting variable with an increasing role in 2009.
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