Thailand: Manufacturing production plummets to eight-month low
October 31, 2012
In September, manufacturing output plunged 13.7% over the same month last year, which represents the fastest steepest contraction since January. The result undershot both the revised 11.2% decline recorded in August (previously reported: -11.3% year-on-year) and market expectations, which had factory output improving somewhat to a 9.9% contraction. The monthly drop mainly reflected contractions in manufacturing of electronics, particularly of hard disks as well as in output of food products. On the other, hand cars production continued to show healthy growth. A month-on-month comparison underlines an even sharper deterioration in September, as manufacturing production tumbled 4.8% on a seasonally adjusted basis, which contrasted the 0.9% increase observed in August. As a result of the annual plunge, the trend continues to point downwards, with the annual average variation in manufacturing output falling from minus 12.0% in August to minus 13.1% in September. Despite the recent deterioration observed in manufacturing production, the Office of Industrial Economics (OIE) expects output to bounce back in the last quarter this year, although that will be as a result of low base of comparison in the same period of 2011, when a devastating flooding damaged production. The OIE expects manufacturing output to expand between 5% and 6% this year.
Author: Ricardo Aceves, Senior Economist