Thailand's manufacturing production index (MPI) in August fell 4.4% year-on-year to 100.58 points, suffering from a bearish Thai economy and a resurgent US-China trade war, says the Office of Industrial Economics (OIE).
The MPI in August dropped the fourth month in a row.
As expected, the OIE cut the 2019 MPI outlook to stay flat at 0-1%, a downgrade from a previous projection of 2-3%.
Aditad Vasinonta, the OIE's deputy director-general, said the country's output in August shrank for cars, auto parts, electronics parts, rubber, steel products and sugar.
"Those products are mostly made for exports, with local manufacturers receiving lower purchase orders from overseas buyers because of the deceleration of global trade," he said.
"As a result, overall industrial product shipment in August fell by 9.2%."
Mr Aditad said hard disk drives, frozen foods, water, liquor and palm oil shipments increased last month.
According to the OIE, the country's capacity utilisation was 65.8% in August, up slightly from 65.3% in July.
He said the baht's appreciation also contributed to lower exports.
"The baht has gained the most among out export peers -- 5.8% year-to-date against the dollar," said Mr Aditad. "Currency movement has to monitor closely."
The OIE has a positive outlook on the government's stimulus package worth 316 billion baht, meant to beef up the Thai economy in 2019-20. The latest measures include a 1,000-baht cash giveaway and 15%-rebate scheme for 10 million Thais.
"The measures should bring positive momentum to the country's economy as they are express bullets shot amid current bearish sentiment," he said.
Mr Aditad said the flooding of 2 million rai in the Northeast is also lowering the purchasing power of locals.
The OIE is also monitoring any impacts on the provincial food and processed food sectors.