Thailand’s manufacturing sector shrank for the first time in 20 months in August as the contraction of new orders deepened amid weakening demand.
The nation’s manufacturing purchasing managers’ index (PMI) was recorded at 48.9 last month, down from 50.7 in July, signaling a decline that was the fastest rate since September 2021, according to a survey by S&P Global.
A PMI reading above 50 indicates expansion in the manufacturing sector, while a reading below 50 reflects contraction. According to the survey, despite lowered input inventory holdings and staffing levels, which were in line with weakening demand, manufacturers increased production again as they worked through existing orders.
Last month, manufacturing business confidence climbed to its highest level since June, with firms hopeful that economic conditions can improve and help support demand.
Looking ahead, while output remained positive thanks to existing orders, Jingyi Pan, Economics Associate Director at S&P Global Market Intelligence, said a lack of new work replenishment would worsen production conditions.
Pan said, “Cost pressures eased for Thai manufacturers, which is again moving in the desired direction of recent monetary policy adjustments, though firms continued to share their accumulated cost burdens with clients”. (NNT)
