Manufacturing expansion on the cards for next year

The Office of Industrial Economics (OIE) forecasts the Manufacturing Production Index (MPI) next year to rise 2.5%, in line with the GDP contribution from the manufacturing sector.

Aditad Vasinonta, deputy directorgeneral of the OIE, said the MPI should increase by 2-3%.

The key positive factor next year is the planned general election on Feb 24, which has increased both investor and consumer confidence and led to movement in the business and industrial sectors.

“The general election date has forced many operators to plan new investment projects and seek measures to handle the country’s political progress,” Mr Aditad said.

He said the government is speeding up infrastructure megaprojects, expecting them to be the country’s economic engine in 2019.

The government’s action plan for 2016 had 20 projects and 2017 had 36 projects. As of Nov 5, 19 of the projects are under construction with a combined value of 709 billion baht.

The government’s Eastern Economic Corridor (EEC) scheme is being implemented, with bidders sought for the highspeed railway linking three airports, a maintenance repair and overhaul centre at U-tapao airport, and the third phases of Laem Chabang and Map Ta Phut seaports.

“Most megaprojects in the EEC will announce winning bidders next February as well,” Mr Aditad said.

He said fluctuations in the global economy and financial sector are key risks to economic expansion, particularly for the manufacturing sector.

The negative factors are the US-China trade war, the slowing Chinese economy, fragile growth in emerging countries and oil price movements.

For this year, the OIE is confident that the MPI will grow 2.5% as projected earlier.

Yesterday, OIE reported that the MPI in October bounced back to rise 4.1% to 112.79 points after falling for the first time in 17 months in September.

The MPI last month was led by higher production volume of cars and engines (+16.7%), cigarettes (+434.6%) and sugar (+145.1%). Petroleum and air conditioners also showed increases.

The overall utilisation rate in October stood at 67.8%.

Despite the decline in September, the MPI in the first 10 months rose 3%.

In October, three segments dropped: rubber products (-23.8%), electronic parts (-3.1%) and vegetable oil (-10.4%).