Thailand: Manufacturing output continues to slow in November
December 30, 2010
In November, manufacturing production rose 5.6% over the same month last year, which was below the revised 6.0% expansion observed in October (previously reported: +6.2% year-on-year) as well as market expectations of a 6.8% rise. The reading represented the weakest expansion in manufacturing output since October 2009. The slowdown in November was mainly the result of a contraction in the manufacture of textiles, which slipped 3.1% annually (October: +4.6% yoy). In addition, the manufacture of refined petroleum decelerated in November, growing 0.4% (October: +2.8% yoy). However, a month-on-month assessment does not corroborate the deceleration suggested by the annual figures. Manufacturing output expanded a seasonally adjusted 0.71% over the previous month, contrasting the 0.76% decline observed in October. As a result of the November deceleration, the trend now points to a moderation in the sector's recovery, with the annual average variation in manufacturing output falling from 17.6% in October to 17.4% in November, reversing the upward trend observed since October 2009. The Central Bank expects the economy to have expanded between 7.3% and 8.0% in 2010 and to grow between 3.0% and 5.0% this year. In addition, the Finance Ministry expects the economy to slow from an estimated 7.8% expansion in 2010 to a 4.5% increase, as weak external demand dampens exports.
Author: Ricardo Aceves, Senior Economist