Production index declines in nov

The global downturn has finally hit Thailand's manufacturing industry, with the manufacturing production index (MPI) in November dropping 8.36 percentage points year on year due to lower orders from overseas, the Office of Industrial Economics said yesterday.

Director-general Arthit Wuthikaro said the industries most affected were gems and jewellery, electronic parts, automotive, and plastic pellets.

The MPI is expected to decline by a further 5.5 percentage points in the first half of next year. However, Arthit said the index would probably be boosted in the second half if the government's stimulus package works effectively and political stability is restored.

In November, small and medium-sized enterprises (SMEs) in particular showed less confidence in their business outlook.

In the month when protests by the People's Alliance for Democracy closed Bangkok's two commercial airports, the trade and service sentiment index (TSSI) dropped to 42.5 from October's 43.3, according to a survey by the Office of Small and Medium Enterprises Promotion (Osmep).

Osmep acting director-general Bhak Tongsom said the retail and service sentiment indexes had both dropped, from 44 and 43.5 respectively in October to 41.8 and 43.1 in November. Meanwhile, the wholesale sentiment index increased to 42.4 from 40.6 in October.

Political uncertainty - especially the closure of Suvarnabhumi and Don Mueang airports - was the main factor affecting TSSI confidence in November.

SMEs were also concerned that the country's economy would be hit by the global downturn and that purchasing power could drop. This would damage their financial results this year and into next year, Bhak said.

However, the sharp reduction in oil prices is positive news for SMEs as it has helped them lower production costs, he added.