
Thailand's Manufacturing Production Index (MPI) decreased by 1.79% year-on-year in 2024, due mainly to a slowdown in the automotive industry and higher imports that affected local manufacturers, says the Office of Industrial Economics (OIE).
The index tallied 95.8 points at the end of last year, following a drop in December of 2.11% year-on-year to 90.2 points.
"We initially believed the 2024 MPI would decrease by 1.6%, but it declined further," said Passakorn Chairat, director-general of the OIE.
He said the weak MPI was reflected by the Federation of Thai Industries (FTI) downgrading its car manufacturing target two times last year.
In November, the FTI's Automotive Industry Club reduced Thailand's car production target to 1.5 million vehicles, down from 1.7 million, the lowest target since 2021.
This was the second revision after the club slashed its target in July from 1.9 million to 1.7 million.
Banks' strict criteria for auto loans and a decline in car exports from January to October were the main factors in the club's decision.
The club recently reported car manufacturing missed the target, tallying 1.46 million vehicles in 2024.
According to the OIE, the drop in the December MPI partly resulted from a decrease in car manufacturing by 22.7% year-on-year, especially in the pickup and passenger car categories.
The sluggish domestic car market amid elevated household debt and the slowdown in car exports were attributed for the decrease.
In December, the production of electronic parts and circuit boards, especially integrated circuits and printed circuit boards, decreased by 13.5% year-on-year as overseas orders shrank.
Palm oil production sank by 32.5% due to lower palm output, following drought in early 2024 and floods in the southern region during the end of the year.
More imports also contributed to the MPI decline last year, said Mr Passakorn.
Last year the import value increased by 6.3% year-on-year, driven by more purchases of products from China, Taiwan and Vietnam, with the value increasing by 1.3%, 24.4% and 18.1%, respectively.
Capacity utilisation in Thailand was 58.4% in 2024.