31-8-2023 (BANGKOK) Factory output in Thailand experienced a larger decline than anticipated in July, primarily due to a slump in exports caused by weak global demand. According to a ministry official, the manufacturing production index (MPI) recorded a 4.43% year-on-year decrease in July, marking the tenth consecutive month of contraction. This figure exceeded the 4.0% drop forecasted in a Reuters poll for the same period.
The sluggishness in factory output can be attributed to the global economic slowdown, although domestic consumption has shown some resilience thanks to robust tourism, stated Warawan Chitaroon, head of the Office of Industrial Economics at the industry ministry. Chitaroon further explained that various domestic factors have indicated a slowdown in the sector. While there may be signs of short-term improvement in the last quarter of the year after October, the overall trend still remains downward.
From January to July, factory output declined by 4.54% compared to the previous year. Industrial goods, which account for approximately 80% of total exports, have experienced a continuous decline over the past ten months. In light of these circumstances, the ministry has revised its 2023 MPI forecast, projecting a fall of 2.8% to 3.8%, as opposed to the previous estimation of zero to 1% growth.
Thailand’s customs-based exports also faced a setback, contracting by 6.2% in July compared to the same period last year. This decline surpassed analysts’ expectations of a 0.75% dip. Additionally, exports slumped by 10.8% from June, marking the tenth consecutive month of decline.
