Thai industry faces uneven outlook as risk factors weigh on sectors
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Pimjai Leeissaranukul said 16 industry groups faced four risk factors, while 13 others were expected to expand in the second quarter.
- Sixteen industry groups, including construction materials, textiles, and plastics, face risks from high production costs, raw material shortages, cheap imports, and weakening consumer purchasing power.
- In contrast, 13 other sectors, such as electronics, food, cosmetics, and electric vehicles, show strong expansion prospects driven by growing exports, rising domestic demand, and supportive government policies.
- The overall industrial outlook is negatively impacted by broader factors including the Middle East conflict affecting energy costs, accelerating inflation, a sharp rise in imports, and labor shortages.
- Despite challenges, the sector is supported by positive economic trends, including a significant increase in investment applications (up 142% YoY), strong export growth, and government stimulus measures.
Pimjai Leeissaranukul, chair of the Federation of Thai Industries (FTI), said at a briefing on the FTI’s management policy for the 2026-28 term, under the theme “The New Chapter of Thai Industry: Empowering Growth with 5I” to drive Thai industry to compete on the global stage, that monitoring of Thai industry groups in the second quarter (April-June 2026) found 16 industry groups had been affected by four risk factors, comprising:
- The cement, steel, aluminium, ceramics, roofing materials, and glass groups faced high production costs, including energy, raw material, and transport costs.
- The plastics, chemicals (fertilisers), printing, and packaging groups faced raw material shortages.
- The textiles, garments, leather products, footwear, and furniture groups faced cheap imported goods from overseas.
- The gems and jewellery and creative handicrafts groups faced weakening purchasing power and a slowdown in tourist arrivals.
Meanwhile, there were 13 industry groups with expansion prospects in the second quarter, comprising:
- The electrical and electronics, air-conditioning, food and beverage, and rubber products groups benefited from expanding overseas markets.
- The cosmetics, pharmaceuticals, medical devices, and palm oil groups benefited from growing domestic demand.
- The electric vehicle, machinery and automation systems, biotechnology, renewable energy and environmental management, and digital or data centre groups were supported by government policy.
Pimjai also outlined the Thai industrial situation in 2026, saying the factors affecting the sector included positive factors as follows:
- Applications for investment promotion through the Thailand Board of Investment (BOI) continued to grow. In the first quarter of 2026, applications for investment promotion totalled THB1 trillion, up 142% year on year, especially in the digital/data centre group, where applications were worth THB870 billion, up 822% year on year.
- Exports expanded strongly in January-April 2026, growing 10.44% year on year, particularly electronics products, which rose 56.98% year on year.
- Economic stimulus measures under the THB400 billion emergency loan decree, THB200 billion for the Thais Help Thais Plus project and state welfare card top-ups, and THB200 billion for energy restructuring, were expected to support GDP growth by 0.6-0.8%.
- Other assistance measures included relaxed LTV measures and the PromptBiz/Quick Big Win schemes to help SMEs access loans.
- Thailand’s credit outlook was Stable, from Negative, supporting confidence among foreign investors.
Negative factors for the industrial sector comprised:
- The prolonged conflict in the Middle East affected energy costs and caused raw material shortages, affecting prices of related goods.
- Accelerating inflation, with inflation in April 2026 up 2.89% year on year due to higher oil and food prices, pressured purchasing power. Full-year 2026 inflation was forecast at 2.0-3.0%.
- Imports expanded sharply in January-April 2026, rising 35.72% year on year, especially consumer goods such as ready-made clothing (+20.87%), soap, detergent, and cosmetics (+20.50%), and electrical appliances (+16.12%).
- Labour shortages in construction, manufacturing, and agriculture affected production capacity.
- Concerns over super El Niño conditions in mid-2026 increased the risk of prolonged dry spells and drought, with lower water reserves.
