Thailand: Manufacturing output contracts on the back of supply chain disruptions
April 29, 2011
In March, manufacturing output fell 6.7% over the same month last year, which was well below the revised 3.0% contraction observed in February (previously reported: -3.4% year-on-year) and market expectations, which had seen manufacturing output dropping 4.6%. The reading marked the sharpest fall since August 2009. The monthly drop reflected the impact of trade and supply chain disruptions after the 11 March Japan earthquake, as manufacturing of electronics and computing machinery fell 20.2% year-on-year. In addition, contractions in the manufacturing of textiles (-8.1% yoy) as well as in petroleum products production (-7.0% yoy) also contributed to the weaker March result. A month-on-month assessment confirms the contraction suggested by the annual figures, as manufacturing production fell a seasonally adjusted 0.10% in March. Owing to the monthly drop, the trend points to a sluggish performance in the manufacturing sector, with annual average growth in manufacturing output falling from 9.8% in February to 6.4% in March, the slowest pace in one full year. Meanwhile, the Bank of Thailand anticipates that economic activity will grow 4.1% this year and to accelerate further in 2012, reaching 4.2%.
Author: Ricardo Aceves, Senior Economist