Thailand: Manufacturing output contracts for the third consecutive month
May 31, 2011
In April, manufacturing production shrunk 7.8% over the same month last year, which was below the 6.7% contraction observed in March and undershot market expectations, which had seen manufacturing output dropping a more moderate 5.0%. The April result represented the third straight month with industrial production mired in the red and also marked the sharpest contraction since August 2009. The monthly contraction continued to reflect the impact of supply chain disruptions caused after the Japanese catastrophes in March, as manufacturing of electronics and computing machinery fell 16.8% year-on-year (March: -20.2% yoy). In addition, contractions in the manufacturing of communication equipment (-1.2% yoy) as well as in the production of furniture (-25.0% yoy) also contributed to April result. A month-on-month assessment, in fact, points to an even sharper deterioration than the contraction suggested by the annual figures, as manufacturing production fell a seasonally adjusted 3.30% over the previous month, which was well below the 0.70% drop observed in March. Owing to the monthly fall and the earthquake's negative economic impact, the trend suggests that the manufacturing sector's performance will remain sluggish in the months ahead, with annual average growth in manufacturing output falling from 6.4% in March to 4.1% in April, the slowest pace in more than a year.
Author: Ricardo Aceves, Senior Economist