Gems & jewellery sector hit by high cost of raw materials

The Office of Industrial Economics (OIE) yesterday said the Manufacturing Production Index (MPI) for the gems and jewellery industry in the month plunged 29.3 per cent year on year.

Sales of gems and jewellery also shrank 30.9 per cent from the same period last year, because of surging product prices resulting from higher production costs, said director-general Atchaka Sribunruang Brimble.

"Consumers are cutting spending on extravagant goods in the light of higher inflation," she said.

The main export destinations, particularly the United States and European countries, were slower as a result of the sub-prime crisis. However, the export value of gems and jewellery is expected to be higher than last year due to increased product prices.

Meanwhile, the OIE reported that the total MPI in May was up 8.04 per cent from the same period last year, which mainly resulted from an expansion in the production of hard-disk drives

and in automotive industries.

Hard-disk drive production and sales surged 35.2 per cent and 33.5 per cent, respectively. Consumer-electronics products such as mobile phones, digital cameras and small multimedia players also enjoyed an increase.

Automotive production in May grew 12.5 per cent year on year. Domestic sales increased 6.9 per cent as a result of higher demand for alternative-fuel vehicles, while exports surged 30.34 per cent.

However, Atchaka said rising energy prices and inflation would probably reduce automotive sales in the domestic market in the second half of the year.