Thailand: Manufacturing production returns to positive growth
May 31, 2012
In April, manufacturing output increased 0.5% over the same month a year ago, which contrasted the revised 2.7% drop observed in March (previously reported: -3.2% year-on-year) and represented, in fact, the first expansion after seven consecutive contractions. The improvement was mainly driven by the production of cars, which soared 83.1% in year-on-year terms. According to the Industry Ministry, about 72% of the affected firms by last year's flooding are up and running, with the Ministry expecting manufacturing production to rise between 6% and 7% this year. A month-on-month comparison confirms the improvement suggested by the annual figures, as manufacturing output expanded a seasonally adjusted 1.5% in April, which contrasted March's 3.0% drop. The trend suggests that the manufacturing sector is gradually recovering, with the annual average variation in manufacturing production rising from minus 10.5% in March to minus 9.8% in April. The Bank of Thailand expects manufacturing production to recover in the second quarter. Meanwhile, the Bank projects the economy to expand 6.0% this year. For 2013, the Bank anticipates growth to slow slightly to 5.8%.
Author: Ricardo Aceves, Senior Economist