Thailand's Manufacturing Production Index (MPI) is expected to be tepid this year, with growth of 0-1% because of a combination of business obstacles domestically and overseas, as the April reading was the lowest in 34 months.
The April MPI plunged 8.14% year-on-year to 83.5 points, the seventh consecutive decline since October last year, said the Office of Industrial Economics (OIE).
OIE director-general Warawan Chitaroon attributed the decrease to an export slowdown as purchase orders wane, as well as the Songkran holidays when factories closed to celebrate the festival.
Capacity utilisation in April was 53.8%, down from 66% in March.
"Other risk factors include banking problems in the US, which affected new orders of goods from Thailand. Thai manufacturers also struggle to deal with expensive electricity bills and high interest rates which will increase costs and reduce competitiveness, eventually dealing a blow to exports," she said.
Given the economic uncertainties, the OIE downgraded its MPI growth target for a second time this year from a range of 1.5-2.5%. In February, officials reduced it from a projection of 2.5-3.5%.
Mrs Warawan said her office is closely monitoring the MPI in May, which is likely to be affected by negative factors, including the global economic slowdown, geopolitical conflicts, high household debt and high interest rates.
The industries that contributed to the growth of MPI in April included sugar manufacturing, which expanded by 19.1% year-on-year, driven by demand in the domestic and overseas markets.
Petroleum production also increased in April by 1.8%, thanks to more travel following the reopening of the country.
The manufacturing of malts and malt-derived alcohol increased by 17.5% year-on-year as the higher number of tourists and Songkran boosted domestic consumption.
The production of paper expanded by 11.4% year-on-year due to more demand for paper products used in the lead-up to the general election and the start of a new school semester.