By Nopparat Chaichalearmmongkol
BANGKOK--Thailand's industrial production activity fell for the
16th consecutive month in July, government data released Friday
showed--a decline driven by falling auto production and sluggish
export growth.
The Manufacturing Production Index (MPI), which measures the
volume of production in the country's manufacturing sector, slipped
5.2% year-over-year in July, according to the Office of Industrial
Economics (OIE) at the Industry Ministry.
The latest figure showed a slower decline when compared with a
revised 6.3% contraction in June.
Moody's Analytics blamed monthslong political unrest, which
ended in May with a military coup, for the July contraction, saying
it is still weighing on production, while HSBC added that weak
export growth and slow recovery in domestic demand have contributed
to lower production activity.
Exports declined 0.85% year-over-year while imports contracted
2.86% on-year in July.
The country's automotive production contracted 24.89% in July
from the same time last year, largely because of a drop in local
demand after the end of the government's first-car tax incentives
in 2013, said the OIE.
In addition, capacity utilization, a gauge on how fully used
factories are, slipped slightly to 60.09% in July compared with a
revised 60.58% in June.
Despite improved consumer and business sentiment, the latest
data reflects ongoing challenges for the military government to
revive the economy.
"If export growth stays weak, there could be negative impacts on
Thailand's domestic demand, including delays in business investment
to expand existing capacity, and weaker consumption spending," says
Nalin Chutchotitham, an economist at HSBC. "The government must
continue with measures to boost exports."