Thailand: Manufacturing output contracts for the fourth consecutive month
June 30, 2011
Meanwhile, the Bank of Thailand anticipates that economic activity will grow 4.1% this year before accelerating further in 2012 to reach 4.2%. In May, manufacturing production fell 3.9% over the same month last year, which, nonetheless represented an improvement compared to the revised 8.1% contraction tallied in April (previously reported: -7.8% year-on-year), overshooting market analyst predictions that manufacturing output would drop 4.8%. Despite the improvement, the May result represented the fourth consecutive month of declining manufacturing output. The monthly contraction continued to reflect the supply chain disruptions related to the Japanese catastrophes of 11 March, in particular in the production of automobiles (April: -27.8% yoy; May: -32.5% yoy). In contrast, electronics manufacturing swung from a 16.8% contraction in April to a 0.2% increase in May. A month-on-month assessment confirms the improvement suggested by the annual figures, as manufacturing production rose a seasonally adjusted 0.69% over the previous month, which contrasted the 3.53% drop observed in April. Owing to the monthly fall and the earthquake's negative economic impact, the trend suggests that the manufacturing sector's performance will remain anaemic in the months ahead, with annual average growth in manufacturing output falling from 4.1% in April to 2.5% in May.
Author: Ricardo Aceves, Senior Economist