28-9-2023 (BANGKOK) Thailand’s manufacturing sector faced a significant challenge in August as the manufacturing production index (MPI) dropped by 7.53% compared to the same period last year, according to the country’s industry ministry. This decline is primarily attributed to a slowdown in exports due to soft global demand.
The August MPI figure was even worse than anticipated, as it surpassed the 6.5% year-on-year drop forecast in a Reuters poll. This downturn followed July’s 4.43% decline, underscoring the continued struggles faced by Thailand’s manufacturing sector.
The ministry cited a global economic slowdown as the key factor affecting production. The unfavorable conditions have had a cumulative impact on the sector, with factory output falling by 4.95% year-on-year for the January to August period. It’s essential to note that industrial goods make up approximately 80% of the country’s total exports. Remarkably, despite these challenges, Thailand’s total exports experienced an unexpected 2.6% year-on-year increase in August.
In light of these circumstances, the industry ministry revised its 2023 MPI forecast downward. The new projection indicates a fall of 2.8% to 3.8%, compared to the earlier forecast of zero to 1% growth.
