Thailand's manufacturing production index (MPI) in 2019 is unlikely hit the target of 2-3% growth, attributed to US-China trade tensions and the bearish Thai economy, says the Office of Industrial Economics (OIE).
Director-general Thongchai Chawalitpichaet said the full-year MPI is expected to drop 3.8%.
Yesterday the OIE reported the MPI in November fell 8.27% to 96.77 points because of lower production of cars, engines, petroleum, rubber products and steel.
The dip in November was the seventh month in a row, with the MPI falling 3.6% from January to November for an average of 101.87 points.
"The MPI last month reflected the trade dispute, slowing the global economy in the third quarter," said Mr Thongchai.
"Thailand's trade partners such as the US, Europe and China had unfavourable economies in the third quarter, so the country exported less industrial projects than expected."
He said local purchasing power remained weak and the baht's appreciation over the 11 months also pressured the MPI.
The OIE reported the utilisation rate in November was 63.2%, an uptick of 0.17 percentage points from October.
However, the office is optimistic about the 2020 MPI rising 2-3% amid US-China trade tensions.
Mr Thongchai said the OIE expects the trade war to ease as both sides are resuming negotiations.
"A truce will have a positive outlook for the global market and the Thai economy," he said.
"Meanwhile, the MPI will be driven by the government's stimulus measures, injecting money into the economic system."
The OIE is monitoring negative momentum from the trade dispute, the strong baht and bearish Thai exports, said Mr Thongchai.
The office allocated a budget of 1.2 billion baht to support S-curve industries in 2020 as it aims to encourage Thai and foreign companies to improve their manufacturing facilities by adopting advanced technologies.
"The Eastern Economic Corridor [EEC] scheme is the flagship location to attract new investment flows and build up investor confidence. Both the S-curve and EEC can help the country's economic sentiment thrive," he said.
In addition, the OIE has a positive outlook on the country's tourism and consumption sectors because the government launched many measures to stimulate massive spending from Thais and foreigners.