Manufacturing index rises for first time in 8 months

The MPI stood at 166.2 points, representing a year-on-year increase of 0.5 per cent, said deputy director-general Aphiwat Asamaporn.

The April figure marked the first increase since the onset of the devastating floods last September.

Production capacity stood at 62.24 per cent last month, a rise of 54.43 per cent from the same period a year ago, he said.

Key contributors to the turnaround were the automobile, electrical appliance and beer industries.

Auto production rose 83.1 per cent compared to the same period last year, when output faced a sharp fall due to the earthquake and tsunami in Japan.

Electrical-appliance output also rose, especially for air-conditioners, which experienced a 13.8-per-cent increase. Hotter-than-normal weather so far this year was behind the rising market for air-conditioners.

The weather also assisted the fortunes of the beer industry, whose production rose 8.2 per cent, helped by rising consumption during the closing months of the European football season.

Hard-disk drive, electronic parts, apparel and processed seafood were among the sectors bucking the trend by declining against the index.

Taking the first four months of the year together, the MPI came in at 172.5, a drop of 5.24 per cent year on year.

The average production capacity rate was 62.86 per cent, up 60.57 per cent compared to the same period last year.

During the period, the automobile, petroleum, beer, processed chicken and drug sectors were all positive, while hard-disk drives, electronic parts and apparel put the brakes on the index.

The MPI dropped 6.9 per cent in the first quarter, but the OIE expects the index will rise 2 per cent in the current quarter.

While overall industrial gross domestic product declined 4.24 per cent in the first quarter, the OIE expects an increase of 4.5 per cent in the second three months of the year.

Aphiwat believes the office’s annual target will be achieved with an increase of 6-7 per cent in the MPI, following a predicted rise of 4.5-5.5 per cent in industrial GDP in the second quarter.

However, the office stands ready to revise its numbers in July if the prevailing factors make it necessary to do so, he said.

He stressed that risks existed in the second and third quarters, with Europe’s economic woes high amongst them.

Although Greece is not a major importer of Thai goods, the economic turmoil it is facing will have a negative impact on major countries in the European Union such as Spain, France and Italy.

The global downturn will also hit the 27-member EU bloc, resulting in declining consumption and export-driven Asian economies receiving a hit. Exports from Thailand to Asean countries and China would suffer as a knock-on effect, he said.

Oil price fluctuations are another problem. Even though the price of crude has started going down, it is unstable in the long term due to continuing problems in the Middle East.

Moreover, he said, local manufacturers are faced with rising prices of liquefied petroleum gas and natural gas for vehicles, as well as a sharp rise in the minimum wage.

The situation will force them to increase their prices, which means they will find it even harder to compete with their rivals, he warned.