Thai factory output reports biggest gain in eight years
April was a month when Thailand flexed its manufacturing muscle. The Kingdom’s factory output recorded its fastest rise in eight years with an 18.4 percent increase over the same month last year, as automobile, air conditioning and beer manufacturers went into overdrive.
That is good news for the Thai economy, which is rapidly recovering from a global economic downturn caused by the coronavirus pandemic. Although the Bank of Thailand and others have scaled back growth forecasts for this year, the record setting rise in the manufacturing production index (MPI) signals that better days are coming.
Manufacturing for domestic consumption and exports is the backbone of the Thai economy. April was the second consecutive month that factory output increased. The Ministry of Commerce cautioned, however, that the improvement came from a low base, as last year the pandemic’s economic effects were even more severe at home and abroad.
The MPI jumped 18.46 percent from April last year. That was better than the forecast in a Reuters poll that predicted a 14.6 percent increase. It was also a substantial improvement on March’s revised 5.89 percent increase and suggested that manufacturing is gaining momentum.
April is a month of holidays in Thailand. On the one hand, that made the increase in output even more impressive. On the other hand, officials said the down time led to a drop in capacity utilization, which was 59.58 percent in April, a decline from 70.65 percent in March.
That decline will most likely be short term. Especially as Thailand’s exports have also been on the rise during the first quarter of this year.