Thailand
Thailand: MPI in September drops for fifth month in a row
Thailand’s manufacturing production index (MPI) in September fell 4.7% year-on-year to 97.5 points, suffering from a bearish economy and sluggish global trade sentiment, says the Office of Industrial Economics (OIE).
The MPI in September dropped for the fifth month in a row and declined 3.1% from the previous month.
Thongchai Chawalitpichaet, the OIE’s acting director-general, said the contraction led the MPI for the third quarter to drop 4.2%.
The country’s output of petroleum, rubber, cars, auto parts, steel products and electronic parts shrank in September.
“Global trade continued to shrink while overseas purchase orders dropped, resulting in the export of industrial goods to decline by 1.6% last month,” Mr Thongchai said. “But beer, liquor and air conditioners still reported positive shipments.”
The OIE said the country’s capacity utilisation was 63.9% in September, down from 65.8% in August.
Mr Thongchai said the resurgent US-China trade war has been a key factor pressuring overall global trade sentiment, while Thailand’s business confidence has dipped significantly.
The OIE has already forecast the 2019 MPI to remain flat at 0-1%, a downgrade from 2-3% growth after witnessing the index’s decline since May.
“It is possible to cut the 2019 MPI outlook further, blaming myriad risks such as baht appreciation, the trade war and the US suspending benefits under the Generalized System of Preferences for Thailand,” Mr Thongchai said.
But the OIE has a positive outlook on the government’s stimulus package to be launched soon, featuring tourism measures for Thais and foreigners and the second phase of the Taste-Shop-Spend scheme’s cash handouts and rebates.
“The stimulus measures are expected to beef up the economy in terms of local consumption and tourism,” Mr Thongchai said.
For the automotive sector, the Federation of Thai Industries (FTI) has lowered its outlook for car production in 2019 to 2 million vehicles from 2.15 million, blaming bearish sentiment for both local sales and exports.
The FTI’s automotive industry club reported on Oct 18 that car sales from January to September grew 2% year-on-year, totalling 761,847 units. Monthly car sales contracted for the fourth month in a row.
For car exports, the club said shipments in the first nine months fell by 4.4% year-on-year to 821,101 cars. Export value for the period stood at 423 billion baht, down 6.2%.
On Oct 21, Thai Summit Automotive Co announced that it was stopping operations at Laem Chabang from Oct 26 to Dec 25, citing sluggish orders from car makers.
Source: https://www.bangkokpost.com/business/1782884/mpi-in-september-drops-for-fifth-month-in-a-row