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Manufacturing sector continues to expand in Thailand

Staff Writer | February 2, 2017
Thailand’s manufacturing economy retained growth momentum at the start of the year, although the rate of improvement remained slight overall.
Thailand manufacturing
Thailand   Nikkei Thailand Manufacturing PMI
Strengthening operating conditions were driven by continued growth in new orders and output alongside hiring of additional staff and another rise in input stocks.

That said, anticipation of further inflationary pressures motivated some firms to front-load orders and purchases. Meanwhile, floodrelated disruptions weighed on supplier performance.

After registering an increase for the first time in eight months during December, the seasonally adjusted headline Nikkei Thailand Manufacturing Purchasing Managers’ Index (PMI) indicated a further improvement in the health of the sector in January.

At 50.6, the rate of growth signalled by the index was similar to December’s reading and the jointstrongest in 13 months, though marginal overall.

The headline index was underpinned by positive readings for all five key variables, with growth in production, new orders and employment recorded. Further increase in stocks of purchases and lengthening lead times also boosted the PMI. Stronger client demand led to another rise in the level of new business.

However, the rate of increase slowed from December, and was slight only. Some panellists attributed slower growth in new work to weak economic conditions and competition in overseas markets.

On the other hand, new product launches helped to support growth of order books. There was also evidence that anticipation of higher input prices has led some firms to front-load their orders.

Encouragingly, foreign demand strengthened for the first time since August 2016, albeit marginally.