The Thailand Industrial Economy Research Office report indicates that the garment industry is being hit hard by four major challenges, prompting businesses to consider relocating to neighboring countries in search of continued viability.

　　Atichai, head of Thailand's Industrial Economy Research Office, stated that the office is closely monitoring the situation in the country's garment industry, which is currently grappling with four major challenges: the minimum wage standard, labor shortages, the strengthening of the Thai baht, and the slow recovery of key export markets such as Europe and the U.S.

　　It has become a reality that Thailand's apparel industry is gradually shifting production to China, Vietnam, Cambodia, and Laos—strategically addressing domestic labor shortages and rising wage costs. At the same time, these countries continue to benefit from the Generalized System of Preferences (GSP) tariff treatment, which allows Thai exports to access key markets such as the U.S. and the EU. However, the U.S. and the EU are currently considering revoking Thailand’s GSP status, citing the country’s emergence as a developed nation. This development is likely to create greater challenges for Thai products seeking to export to these lucrative markets.

　　For Thai garment factories that lack the conditions to relocate to neighboring countries, relevant authorities have implemented corresponding support measures, particularly for small and medium-sized enterprises (SMEs). For instance, garment designs are being revamped to become more fashionable, helping these factories differentiate themselves from the low-cost clothing imported from China—after all, labor costs in China remain significantly lower.

　　The report assesses that the apparel industry will see a slowdown in growth this year, with Thailand's apparel exports estimated at approximately US$2.448 billion—down 3.41% from last year. Meanwhile, production of garments ranging from low-end to high-end is projected at around 187 million pieces, marking a 2.7% decline, primarily due to the impact of the strengthening Thai baht and the relocation of some garment factories to neighboring countries.