Thailand: Manufacturing production declines less sharply in January
February 29, 2012
In January, manufacturing production declined 15.2% over the same month last year, which followed the revised 25.3% contraction tallied in December (previously reported: -25.8% year-on-year) and the devastating 47.2% plunge recorded in November. The January print was broadly in line with market expectations of a 14.0% decline and showed that manufacturing of electronics, as well as of motor vehicles continue to contract, albeit at a slower pace. A month-on-month comparison confirms the improvement suggested by the annual figures, as manufacturing output increased a seasonally adjusted 19.1% over the previous month, which came in after the 37.8% expansion observed in December. Annual average variation in manufacturing production deteriorated from minus 9.3% in December to minus 10.8% in January. Although flood waters started to retreat in December, recovery in the Thai manufacturing sector is expected to be protracted and, in fact, the Central Bank expects the recovery in manufacturing output to be delayed until the third quarter. Meanwhile, the Bank of Thailand expects the economy to expand 4.9% this year, before accelerating to 5.6% in 2013.
Author: Ricardo Aceves, Senior Economist