Thailand's Manufacturing Production Index (MPI) is likely to contract by 1% this year, given the declines recorded during the first eight months of the year, caused by a raft of economic problems and the impact of severe floods, says the Office of Industrial Economics (OIE).
The best-case scenario for MPI growth is a flat reading, said OIE director-general Warawan Chitaroon.
The office previously downgraded its MPI growth projection for 2024 from a range of 2-3% to 0-1%. It revised down the range again on Thursday to between -1% and 0.
From January to August, the MPI grew by 1.55% year-on-year, with capacity utilisation tallying 58.9%.
Floods in the North were among factors blamed for causing a 1.91% year-on-year drop in the August MPI to 95.08 points.
The floods disrupted travel, the transport of goods and border trade and also caused some factories to halt their operations. Tourist attractions in flood-prone areas were also closed for safety reasons.
"If rehabilitation in flooded areas is slow, consumer purchasing power and manufacturers in affected regions will bear the brunt," said Mrs Warawan.
"Now we just don't know when the floods will stop, so we can't precisely assess all the damage."
Sluggish domestic car sales continued to be a significant factor affecting the index in August. Car production fell by 18.4% year-on-year this month due to banks' stricter criteria in granting auto loas amid high levels of household debt.
Car manufacturing continued to decrease for a 13th consecutive month, she said.
The production of electronic parts and circuits, especially integrated circuits, fell by 11.8% year-on-year due to sluggish demand in the global market.
Thai manufacturers in other industries were also affected by an influx of low-cost products from overseas.
"The number of these imported goods kept growing, bought by people via online platforms," said Mrs Warawan.
Industries that contributed to the August MPI included manufacturers of canned food produced from aquatic animals, particularly tuna. Production soared by 41.6% year-on-year, driven by more purchase orders from the US, Japan and Australia. These countries stockpiled the products in a bid to avoid the impact of geopolitical conflicts on shipping.
Production of computers and peripheral products, especially hard disk drives, increased by 18.8% year-on-year, thanks to demand for new products to replace existing ones.