Thailand’s manufacturing production index slumps 3.14% in May

It also dropped by 13.14% compared to the same period last year, the Office of Industrial Economics (OIE) director-general Warawan Chitaroon said.

The average MPI during the first five months of this year came in at 96.36, representing a drop of 4.49% compared to the same period last year.

However, despite the drop in the manufacturing sector, there were positive developments in other industries. The tourism sector expanded, leading to an increased demand for industrial goods. Automobile production, in particular, saw a significant jump of 17.54%, while the textile and garment industries shifted their focus to speciality fabrics to boost their export potential.

The expansion of the tourism sector also had a positive influence on the demand for various products, including food and beverage items like sugar, frozen and chilled chicken, non-alcoholic beverages, meat and poultry products, seasonings, palm oil, dairy products, spirits, aquaculture products and coffee.

Additionally, there was a notable increase in the production of passenger cars (26.1%) and pick-up trucks (12.9%), driven by a 12.30% surge in car exports compared to the same period last year, Warawan said.

She added that the OIE is closely monitoring the MPI for June, expecting positive factors from tourism, private consumption and the recovery of major trading partners like China and Japan.

However, the ongoing decline in exports, along with uncertainties in the formation of Thailand’s next government may affect investor confidence and the 2024 fiscal budget, Warawan said.

Furthermore, the El Niño phenomenon, leading to below-average rainfall in the country, may affect raw materials in the agriculture industry, she said.

Meanwhile, one industry to watch during this period is the textile and garment industry, particularly speciality fabrics. Entrepreneurs are encouraged to adapt their operations and focus on high-value products with growth potential. Speciality fabrics with properties like waterproofing, fire resistance and disease-filtering can be further developed for medical and health-related equipment, Warawan said.

To reduce dependence on imports, emphasis should be placed on using domestically produced raw materials and promoting the new S-curve development policy in Thailand’s medical technology industry.

This includes focusing on the production of technical fabrics with special properties to boost competitiveness and export potential for the Thai textile and garment industry, Warawan said.

The key industries that contributed positively to the MPI in May compared to the same period last year were automobiles (17.54%), other general machinery like air conditioners (12.57%), sugar (31.14%), motorcycles (22.11%), and basic synthetic plastics and rubber (2.98%). These expansions were driven by different factors like market demand, weather conditions and increased production capacity.