In August, Thailand's manufacturing sector displayed resilience, with stronger incoming new orders and increased production levels, according to the latest report from S&P Global. The headline manufacturing purchasing managers index (PMI) registered at 52.0, a slight decline from July's figure of 52.8 but notably above the pivotal threshold of 50 that distinguishes growth from contraction. The PMI is a composite index derived from various indicators, including new orders, output levels, employment rates, suppliers' delivery times, and inventory levels.
This comprehensive analysis reveals that factory managers in Thailand experienced robust demand for their products, leading to a significant increase in new orders for the second consecutive month. This uptick was attributed to growing relationships with both new clients and existing customers who were placing larger contracts. To accommodate the uptick in demand, manufacturers expanded their workforce, contributing to a notable rise in overall output.
Notably, the rate of employment growth in August was close to the survey's record high reached just two months prior. As a result, the goods-producing sector is on track to deliver its most successful quarter since the second quarter of 2023. Despite the strong levels of production, Thailand's industrial input prices showed signs of moderation in August.
Cost pressures appeared subdued, with average input prices declining for the fifth time out of the last six months. This decrease in input prices has positively impacted profitability, as manufacturers were able to achieve a rise in their output prices. Encouraged by strong sales figures and elevated profit margins, factory managers expressed notable confidence in their future outlooks for the industry.
Sentiment among Thai manufacturers was particularly optimistic, reaching the second-highest level in 16 months, substantially above pre-pandemic sentiment levels. The production outlook of Thailand's manufacturing PMI is grounded in a robust feedback mechanism spearheaded by S&P Global, gathering responses from 400 manufacturers between August 12 and August 21.
The findings highlight not only the current strength of the manufacturing sector but also its positive trajectory going forward, contributing to the overall economic profile of Thailand in the region..