Thailand's Manufacturing Production Index (MPI) dipped by 1.5% year-on-year in May to 98.3 points, underscoring the sluggish manufacturing sector despite an increase in exports, says the Office of Industrial Economics (OIE).
The decrease is mainly attributed to a sharp drop in domestic car sales, especially in the pickup category, and almost no new orders for fashion clothing in the garment industry. "The automotive and garment industries turned sluggish amid an economic downturn in the country and uncertainties following geopolitical conflicts overseas," said Warawan Chitaroon, director-general of the OIE. Economic circumstances in Thailand remain downbeat for households and businesses as energy costs are elevated, while household debt is high, causing banks to be more selective about granting car loans.
However, exports in certain industries such as computers, printers, aluminium and wood products increased. Shipments of industrial goods excluding gold grew by 2.9% year-on-year in May for the second consecutive month, according to the OIE.
Economies in the EU and Japan signalled positive signs as their manufacturing sectors were projected to improve in the future, she said. One contributor to the May MPI was palm oil manufacturing, which expanded by 19.8% year-on-year.
The increase resulted from the impact of drought and strong sunlight, making palms ripen more quickly, eventually increasing output for manufacturers, said Mrs Warawan. Demand for palm oil also increased this.