MPI up for fifth consecutive month on export growth

MPI up for fifth consecutive month on export growth

The value of exports in July hit 700 billion baht. Arnun Chonmahatrakool
The value of exports in July hit 700 billion baht. Arnun Chonmahatrakool

Thailand' manufacturing production index (MPI) in July increased by 5.12% year-on-year for the fifth consecutive month to 91.41 points, thanks to export growth.

Despite Covid-19 outbreaks in many countries, international trade in July was still bustling due to global economic recovery driven by the US, China and Europe, according to the Office of Industrial Economics (OIE).

Thai export value in July stood at 700 billion baht, which was good for the domestic economy, said Industry Minister Suriya Jungrungreangkit.

He played down worries over Covid-19 infections in factories.

"The government is working closely with factory owners to control the infections through various measures including bubble and seal and factory sandbox," said Mr Suriya.

While bubble and seal is aimed at restricting travel among workers, factory sandbox, implemented by large factories with export markets, adopts additional measures to prevent the outbreak by regularly conducting Covid-19 tests among employees and vaccinating them.

Looking at MPI for the past seven months from January to July, the index increased by 8.91% to 99.03 points, compared with 90.92 points last year, said Thongchai Chawalitpichaet, chief of the OIE.

Capacity utilisation, often referred to as "Cap U", was 58.1% in July, an increase from 57.2% in the same period last year. The average Cap U for the past seven months was 64%.

OIE maintains its forecast for the MPI, expecting it will increase by 4-5% this year due to global economic recovery, lockdown easing and the mass vaccination scheme.

"We still need to monitor the situation closely though lockdown easing is expected to be a positive factor for the manufacturing sector," said Mr Thongchai.

Some other factors like higher freight rates caused by the pandemic must also be monitored.

According to OIE, automotive and electronics, including circuit boards, tyres and rubber industries played a key role in driving MPI in July.

Manufacturing of circuit boards and other electronics parts rose by 19.02% year-on-year because of growing demand pushed by the work-from-home guideline and more tech developments.

Global economic recovery fuelled automotive manufacturing which rose by 31.49% year-on-year.

Growth in demand in the car industry led to a rise in rubber and tyre production by 18.55% year-on-year.

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