February index wilts on sugar cane woes
Thailand's manufacturing production index (MPI) fell by 5.19% year-on-year in February to 99.9 points, according to the Office of Industrial Economics (OIE).
The drop comes mainly from the sugar cane, automotive and rubber tyre industries, which have suffered from various external factors such as the US-China trade war and the drought, resulting in production to decrease for both the export and domestic markets.
Thongchai Chawalitpichaet, director-general of OIE, said the organisation is considering cutting Thailand's MPI and industrial GDP outlook in 2020 because of the devastating impact the pandemic will continue to have on the economy.
Earlier this year, OIE projected Thailand's MPI index would grow 2-3% and the industrial GDP at 1.5-2.5%.
While the capacity utilisation rate was 65.3% in February, compared with 66.8% in January, OIE assessed the coronavirus crisis will continue to affect most industries, especially since a state of emergency was declared.
Thailand remains the largest car producer in Asean, but in February production dropped 17.7% year-on-year to 150,640 total vehicles.
Exports dropped 15.6% to 83,385 vehicles year-on-year, while domestic production dropped 20.3% year-on-year to 67,219 vehicles.
Production in the sugar cane industry dipped 36.6% year-on-year because of the drought and rubber tyre output fell by 23.1% year-on-year following a decline in the automotive industry.
"The drought, the global economic slowdown, the trade war between China and the US and the coronavirus outbreak are the main factors affecting the MPI index," he said.
Mr Thongchai said the plastics, petrochemicals and tyre industries are delaying production because manufacturers are waiting to see the extent of the pandemic's impact on sales.
Medical devices and medicine rose 40.4% year-on-year thanks to growing demand in the domestic and overseas market, mainly needed to fight the virus, while frozen seafood rose 26.6% year-on-year as food hoarding becomes more pervasive.
Electronic parts and electronic circuit boards rose 5.6% year-on-year last month because of higher demand in the global market.
Animal feed rose 7.35% year-on-year as producers increased the number of market channels to sell products, in addition to export expansions.
OIE believes the government will be able to address the coronavirus outbreak in Thailand and the economy will recover soon.
The office suggests the government help small and medium-sized enterprises with getting access to soft loans.