The Office of Industrial Economics says the manufacturing sector is recovering due to COVID-led demand

Thailand’s manufacturing production index (MPI) dropped by 17.7 per cent year-on-year to 83.02 points in June, the Office of Industrial Economics (OIE) said on Wednesday.

However, the index did increase by 4.2 per cent from May which represents two consecutive months of expansion as major industries are reopening. 

The manufacturing sector is consequently recovering from the impact of the coronavirus outbreak, the OIE said.

The capacity utilization rate also increased from 52.3 per cent in May to 55.2 per cent in June. 

For the first six months of 2020, the MPI dropped by 12.9 per cent year-on-year while the capacity utilization rate was at 59.9 per cent. 

The rate stood at 66.8 per cent in January before the outbreak hit which took it down to 51.3 per cent in April during the peak of the outbreak. It has now recovered to the current level.

Still, the current capacity utilization rate of about 55 per cent in June is still lower than the rate in 2019 during the same month which was at 65 per cent.

Thongchai Chawalitpichaet, the OIE’s director-general, said that the lowered production level in June was due to the drop in production for cars, car parts, petroleum, and air-conditioning units. 

The production of consumer products, however, expanded in June due to outbreak-led demand.

Such products include pet foods which increased by nearly 11 per cent year-on-year. Canned seafood products also increased by 30.5 per cent.

Milk products, on the other hand, increased by 11.7 per cent due to the increase in demand from neighboring countries, such as Indonesia, Myanmar and Malaysia, as their production output has temporarily stalled because of the outbreak.

The manufacturing of household appliances increased in June by 12.7 per cent year-on-year as well because of domestic demands for refrigerators, microwaves and kettles, and demands from abroad, such as Japan and Bangladesh.

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