Thailand's July factory output slows from virus curbs, outbreaks

Bangkok

THAILAND'S annual factory output growth slowed in July, when Covid-19 containment measures were imposed and extended into August in high-risk areas, as the South-east Asian country deals with its biggest outbreak to date.

The measures in Bangkok and 28 other provinces, however, will be eased from Sept 1, allowing more domestic travel, and malls and restaurants to reopen, to help its struggling economy.

The manufacturing production index (MPI) rose 5.12 per cent in July from a year earlier, missing a forecast rise of 11 per cent in a Reuters poll and against June's 18.27 per cent increase, the industry ministry said on Monday.

While the year-on-year growth was helped by a low base, the output index dropped 7 per cent in July from the previous month, with capacity utilisation falling to 58.12 per cent from 62.50 per cent in June.

August output will still be impacted by restrictions, but there should be a pickup next month, ministry official Thongchai Chawalitpichaet said in a briefing.

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"In September, there is a lockdown relaxation and more vaccines, the situation should improve and the MPI should be better," he said.

Thailand's vaccine rollout is slow, with only 11 per cent of its more than 66 million population fully inoculated.

The manufacturing sector, a rare bright spot in an economy badly hit by a collapse in tourism, has also seen a migrant labour shortage, with outbreaks at factories adding to pressure and threatening exports. Industrial goods account for 80 per cent of total exports.

In July, production of cars, electronics and rubber products increased, but that of petroleum, hard disk drives and beer declined.

However, the ministry still expects the MPI to rise 4 per cent to 5 per cent this year, Mr Thongchai said. REUTERS