Thailand's Manufacturing Production Index (MPI) is expected to remain flat or gain 1% year-on-year in 2024, with climate change among the risks threatening to affect the sector, says the Office of Industrial Economics (OIE).
The downgrade from earlier projections of 2-3% growth followed the MPI rising in April, its first increase in 18 months.
Siripen Kiatfuengfoo, deputy director-general of the OIE, listed negative external and internal factors, such as the impact of global warming, which is expected to keep the MPI low in 2024.
"Freak weather patterns as a result of climate change should affect industries that depend on farm produce," she said.
Though the influence of El Niño, which drove up temperatures in the hot season, is declining, Thailand needs to implement measures to fend off the consequences of climate change, said Royon Jitdon, advisor to the Higher Education, Science, Research and Innovation Ministry's Hydro-Informatics Institute, earlier this year.
A proper management plan is needed to prevent possible drought or flooding problems, he said.
Other risks that could deal a blow to Thai industries include high household debt and interest rates, rising energy expenses, the influx of cheap imported products into the Thai market, and the government's plan to increase the daily minimum wage this year, said Mrs Siripen.
Geopolitical issues, such as the US-China trade war and the slow economic recovery of Thailand's trading partners, could also hamper exports, she said.
According to the OIE, the April MPI increased by 3.43% year-on-year to 90.3 points, attributed to the improving export sector and continual growth of tourism.
However, during the first four months of this year, the MPI averaged 98.2 points, a year-on-year decrease of 2.06%.
The decline resulted mainly from sluggish car manufacturing amid high household debt and elevated energy prices, said Mrs Siripen.
Industries that drove up the MPI in April include air conditioner manufacturing, which enjoyed more purchase orders because of the hot weather and new features such as PM2.5 dust filters, which matched buyer demand.
Animal feed manufacturing rose by 18.1% year-on-year, driven by people's desire to own more pets, while petroleum production grew by 4.7% as tourism activities increased, according to the OIE.
Electronic parts and circuit board manufacturing decreased by 17.1% year-on-year, partly attributed to the sluggish global market.