Thailand's Manufacturing Sector Continues to Shrink in January
The Southeast Asian country's manufacturing purchasing managers' index (PMI) was recorded at 46.7 last month, up from 45.1 in December 2023, an extension of contraction, but at the slowest pace in two months, according to 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, the contraction was attributed to backlogs of work and new orders, which both declined drastically, showing the possibility of a short-term sector downturn.
Despite deteriorating demand conditions, Thai manufacturers maintained production growth as they worked through existing orders with fewer supply delays, the survey said.
Business confidence improvements, along with slower staff reductions and input inventory depletion, indicate that underlying conditions might be improving, said Jingyi Pan, economics associate director at S&P Global Market Intelligence.
However, it will be important to monitor price trends, especially with recent inflationary pressures in the manufacturing sector, Pan added.
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