The Manufacturing Production Index (MPI) decreased by 2.94% year-on-year to 99.2 points in January as the country struggled with many economic problems, especially the impact of the highest level of car seizures in five years, says the Office of Industrial Economics (OIE).
The slowdown in the domestic automotive industry is one of the key factors affecting January's MPI.
"Car manufacturing decreased by 9.63% year-on-year as the number of seized cars rose to 250,000 last year, or around 20,000 units a month," said OIE director-general Warawan Chitaroon. "This situation caused banks to be more cautious in granting car loans, which affected domestic car sales."
Weak purchasing power also dented car sales.
Car exports in January decreased, caused by a shortage of roll-on/roll-off ships, she said.
Other obstacles for the MPI are high household debt, which limits spending, and high interest rates, which raise entrepreneurs' financial costs. The economic slowdown of many trading partners also affected certain local industries, said Mrs Warawan.
In January, petroleum production decreased by 6.4% year-on-year as some oil refineries closed for maintenance, while the manufacturing of electronic parts and circuit boards dropped by 17.7% year-on-year, attributed to the slow recovery of the global electronics market.
Thailand's capacity utilisation was 59.4% this month.
She said she remains upbeat about the 2024 MPI, believing it will increase by 2-3%, driven by exports, which are expected to expand, while foreign tourism arrivals are projected to reach 35 million.