In a recent report by S&P Global, the manufacturing sector in Thailand demonstrated significant resilience and growth in July, bolstered by stronger new orders and an increase in backlogs. The headline Purchasing Managers' Index (PMI) for Thailand's manufacturing field rose to 52.8 in July, an increase from 51.7 in June.
This rise pushes the index further above the crucial 50-point mark, which distinguishes between expansion and contraction in economic activity. S&P Global conducted a comprehensive survey among manufacturers in Thailand, addressing various critical aspects such as new orders, overall output, employment, the timeliness of supplier deliveries, and levels of purchased stock.
Factory managers across the region reported robust demand, highlighting that July saw a renewed surge in new orders. "The upward movement in the PMI was primarily driven by a renewed increase in the volume of new orders," S&P Global noted. "Manufacturers reported receiving new work from both their existing clientele and new customers who have entered the market." In conjunction with the increase in new orders, manufacturing output in Thailand also expanded notably in July.
This growth has encouraged manufacturers to enhance their workforce, evidenced by an uptick in payroll numbers reflected in the survey results. As manufacturers faced the influx of new business opportunities, there was a corresponding rise in the purchasing of raw materials and other inputs necessary for production.
Interestingly, the report mentioned that supplier delivery timelines have remained "broadly stable," a positive shift from the disruptions many manufacturers experienced during the pandemic. Despite the apparent strong demand for products, manufacturers in Thailand reported that input prices were moderate in July.
S&P Global indicated that the data from July pointed to subdued cost pressures within the sector, noting that input prices experienced a decrease for the fourth time out of the preceding five months. This trend may imply a healthy balance between supply and demand dynamics in the Thai manufacturing landscape. Furthermore, manufacturers expressed a strong sense of optimism looking ahead.
The prevailing sentiment amongst those surveyed indicated that they anticipate an increase in production output over the next twelve months, maintaining a level of confidence that is above pre-pandemic trends. "Optimism remained resilient and it is clear that manufacturers in Thailand are looking forward to a bright future," reported S&P Global. It’s pertinent to highlight that the Thailand manufacturing PMI was meticulously compiled by S&P Global based on survey responses gathered from approximately 400 manufacturers during the period from July 11 to July 23. This analysis underlines the crucial role that manufacturing plays in Thailand’s economy, reflecting not only current performance metrics but also providing insights into the future outlook for both production and employment within the sector..