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Published on December 4, 2007

Gross domestic product (GDP) in the manufacturing sector will increase 5.1 per cent next year despite a number of negative factors, the Office of Industrial Economics (OIE) forecasts.

It has projected a 4.5-per-cent GDP growth for the sector this year despite higher oil prices, a global economic slowdown and sub-prime mortgage problems in the United States.

Meanwhile, the Manufacturing Production Index is forecast to rise from 7.7 per cent this year to 8 per cent next year, driven by a higher inflow of investment and rising domestic consumption.

OIE director-general Atchaka Sibunruang Brimble said the situation in the industrial sector would recover because political stability will boost investor and consumer confidence.

"I believe industrial investment will rise and play a significant part in boosting the country's GDP next year, while exports will continue to slow because of economic problems in industrial powerhouses like the US and China," she said.

Production in the electronics industry is expected to grow 10-15 per cent next year due to higher demand for hard-disk drives and air-conditioners.

Atchaka said a lot of electronics goods from China are being rejected by international buyers because of poor quality. This will provide a window of opportunity for Thai manufacturers to boost market share.

The automotive industry is another key industry in powering the country's economy. It has targeted to boost production to 1.4 million units, an increase of 12 per cent year on year.

The increased output will be distributed equally domestically and abroad.

In addition, the economy will be stimulated by the government's infrastructure mega-projects and expansion plans for the petrochemical industry, which will involve a Bt100-billion outlay.

Also, some export-oriented industries are suffering from the baht's appreciation this year such as textiles while

food manufacturers are expected to see dramatic growth next year due to tax exemptions from free-trade agreements.

The textile industry's upstream and midstream production will expand 8.8 per cent, while finished products should grow by about 2.1 per cent.

Meanwhile, exporters will be focused more on Asean member countries. It is expected that markets in the region will grow 10 per cent for upstream and midstream products and 5 per cent for downstream products.

Chalida Ekvitthayavechnukul

 The Nation