THAILAND’S manufacturing sector is expected to grow by a modest 2 to 3 per cent in 2019 after mixed results are seen in January’s manufacturing production index (MPI), according to the Office of Industrial Economics (OIE).
Automotive manufacturing saw the largest year-on-year growth in January, growing by 8.69 per cent, while computer and parts took the biggest hit, falling by 11.10 per cent.
The key factors influencing the manufacturing sectors in January were the decline in exports, and an improved level of domestic consumption.
Last month, the MPI grew by a modest 0.18 per cent, pushed mainly by production growth in the automotive industry.
However, it also experienced production contractions in various goods such as that of computer parts and rubber. The automotive industry saw an 8.1 per cent year-on-year growth in production. In January, 179,595 cars were manufactured, increasing from 166,196 cars in December last year, according to data from the |OIE.
“Despite declining exports, the key reason for the boost in car production is the increase in domestic consumption,” Nattapol Rangsitpol, director-general of the OIE, yesterday told a press conference.
Of the total number of cars produced last month, 78,061 were sold in the country, increasing from 66,545 cars in December last year.
“This marks a 17.4 per cent year-on-year increase, the 25th consecutive month with an increase in domestic sales,” Nattapol claimed.
Meanwhile, car exports have continued to decline, falling from 82,067 in December to 81,583 last month, a 0.6 per cent contraction.
The OIE has forecast the manufacture of 2.15 million cars in 2019, falling from the 2.167 million produced in 2018 due to the decline in exports and the |uncertain global economic situation.
Meanwhile, the production of electrical appliances and electronic goods fell by 5.2 per cent in January.
The category accounts for 3.1 per cent of total manufacturing production in the Kingdom.
Nattapol attributed that decline to the falling price of the solid state drive (SSD) used for data storage in computers.
The manufacture of traditional hard disk drives (HDD), a competing product to the SSD, accounts for 35 per cent of Thailand’s total electronic goods manufactured.
Due to the falling price of the SSD as well as its better performance, demand for the HDD has taken a hit, and in January, the production of computer parts fell by 11.10 per cent year on year.
Rubber production also saw a contraction in production growth. Last month, rubber tyres for cars and motorcycles took a 0.5 per cent and 11.22 per cent hit, respectively.
“This is largely a result of a decline in orders for replacement tyres as well as the increase in competition from Chinese tyre makers,” Nattapol stated.
“Chinese tyre makers have been selling tyres at a cheaper price compared to tyres sold by Thai manufacturers,” he explained.