Thailand's Manufacturing Production Index (MPI) fell in April to 92.76 points, down 0.36% year-on-year, as global conflicts and domestic challenges weighed on industrial activity. The index declined from 108.69 points in March.
Supakit Boonsiri, director-general of the Office of Industrial Economics, attributed the decline to the war in Iran, which has disrupted global energy markets, driven up logistics costs and created raw material shortages.
The conflict also dampened foreign tourist arrivals, despite the Songkran festival, weakening industries tied to tourism such as food and beverages.
Thailand's household debt is 88.7% of GDP, which further eroded consumer purchasing power in April, he noted.
Capacity utilisation tallied 56.4%, lower than expected, underscoring sluggish industrial activity.
Several key sectors dragged down the MPI, with general machinery down 12.9% year-on-year as overseas orders of air conditioners slowed.
Palm oil output fell 16.1% due to extreme heat reducing crop yields, while chemical fertilisers and nitrogen compounds plunged 28% amid raw material shortages linked to Middle East instability.
Despite these setbacks, some industries posted gains. Basic chemicals expanded 19.5%, driven by higher production of caustic soda, chlorine and ethanol, with the latter boosted by rising demand for gasohol amid elevated oil prices.
Basic iron and steel grew 11.1%, supported by demand in packaging and automotive sectors, as well as a low base effect from 2025.
Mr Supakit said the government is accelerating budget disbursement for fiscal 2026 and highlighted the Bank of Thailand's policy interest rate as a stabilising factor.
Stimulus measures are being rolled out to ease household financial burdens during this period of geopolitical uncertainty, he noted.
Meanwhile, Moody's Ratings reaffirmed Thailand's position as a resilient emerging market economy, citing strong readiness to withstand global shocks. This assessment should bolster investor confidence and support long-term business growth in the country, said Mr Supakit.
