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Thai Nov factory output shrinks more than expected, drops for a 20th month
[BANGKOK] Thai factory output fell more than expected in November, the latest evidence that the country's economy is still struggling more than six months after the army took power to end prolonged political unrest.
Thailand is grappling with poor exports and still-subdued domestic demand. Tourism is recovering slowly from falls due to political turbulence, public spending has been slow and consumption remains curbed by high household debts.
On Monday, the Industry Ministry said factory output in November declined 3.5 per cent from a year earlier, more than the 2.7 per cent stumble forecast in a Reuters poll.
November was the 20th consecutive month in which output was lower than a year earlier.
The falls stem largely from weak exports. Industrial goods account for about two-thirds of total Thai exports, which are equal to more than 60 per cent of the economy.
Exports, a pivotal engine of growth, improved in September and October but the gains couldn't be sustained.
The Commerce Ministry said November exports dropped 1 per cent from a year earlier, compared with a 3.6 per cent gain a Reuters poll had expected.
On Friday, the central bank said exports will contract 0.5 per cent this year and only grow 1 per cent in 2015, rather than an earlier-forecast 4 per cent.
Southeast Asia's second-largest economy will grow only 0.8 per cent this year rather than the 1.5 per cent seen in September, the Bank of Thailand said.
Last month, Udom Wongviwatchai, head of Thailand's industrial economics office, said factory output in 2014 would drop 4 per cent, but predicted it would increase in November from a year earlier.
November capacity utilisation in industry was 59.81 per cent, falling below 60 per cent for the first time since April. In October, it was 60.68 per cent.
Thailand is a regional hub and export base for global automakers, and sector output in November was 14 per cent below a year earlier. Last month, domestic auto sales tumbled 22 per cent from November 2013.
The central bank is due to release its economic figures for November, expected to show further weakness in private consumption and investment.
Pimonwan Mahujchariyawong, economist with Kasikorn Research Centre in Bangkok, said she expected the output index to improve next year, given 2014's low base, but by less than 5 per cent.
She said production of building materials should improve because of spending on delayed infrastructure projects, which the government is trying to get moving.