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Economic
Research
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1
June 2017
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Thailand
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Economic Update
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Thailand’s MPI declined 1.7% YoY in April
as automotive output deteriorated at a quicker pace, while F&B and rubber
& plastics production both slipped into the contraction zone. In
contrast, factory output of E&E increased at a faster clip, cushioning
some of the fall. Going forward, we maintain our projection for manufacturing
production to expand 0.7% this year from +0.4% in 2016.
Manufacturing
production growth this year should be underpinned by:
i. Higher
electricals & electronics (E&E) production after the inbound
relocation of several telecommunication equipment makers.
Semiconductor
demand is also expected to ramp up again in 2H17 ahead of the new iPhone
launch;
ii. Increasing
basic material orders as the kingdom moves ahead with its infrastructure
plans;
iii. Stronger
demand for chemicals in parallel with the upturn in global demand;
iv.
Production of automobiles & parts is
set to decline at a slower pace from 2Q17, after Saudi Arabia (5% of auto
exports) reversed its public sector pay cuts of 20% in April;
v. A less
intense rundown of inventory, compared to 4M17.
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Thursday, June 1, 2017
MPI Decline In April Likely Due To Inventory Run-Down
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