Thailand: Manufacturing contracts in February
March 31, 2011
In February, manufacturing production dropped 3.4% over the same month last year, almost reversing the revised 4.1% expansion registered in January (previously reported: +3.7% year-on-year) and contrasting market expectations, which had seen manufacturing output rising 2.2%. Sharp contractions in coke, refined petroleum and nuclear fuel production as well as in food and beverages output were the main drivers behind the monthly drop. In addition, furniture production dropped for a tenth consecutive month. A month-on-month comparison confirms the drop suggested by the annual figures, as manufacturing output fell a seasonally adjusted 1.86% in February, which contrasted the 1.49% increase observed in January. Owing to the monthly drop, the trend continues to point downwards, with annual average growth in manufacturing output tumbling from 12.4% in January to 9.8% in February, after manufacturing output growth reached its peak in October 2010. Furthermore, the Bank of Thailand expects the economy to expand between 3.0% and 5.0% this year, while the Ministry of Finance anticipates the economy will grow 4.5% this year.
Author: Ricardo Aceves, Senior Economist