Robust Demand Sustains Strong Manufacturing Expansion in Thailand

Higher demand at home and abroad supported the continued expansion of the manufacturing sector in ASEAN member state Thailand in May, the S&P Global Thailand Manufacturing PMI survey showed on 1 June. 

The headline S&P Global Thailand Manufacturing PMI showed the 17th consecutive month of growth in the sector, although the headline index fell from the record 60.4 in April to 58.2 in May. Still, the PMI continued to hold well above the 50.0 no-change mark, indicating strong manufacturing sector expansion.

Rising demand and expanding customer base led to a jump in new orders in May. Incoming new orders for Thailand’s manufactured goods increased at the second fastest pace in the survey history, just behind the record from April 2023. Foreign demand also improved, expanding at the quickest pace since July 2021, S&P Global Market Intelligence said.

Supply chain conditions improved, leading to declines in both input cost and output price inflation.

“While input costs climbed again due to higher raw material and shipping fees, the rate of inflation fell markedly to the lowest since August 2021,” S&P Global noted.

Demand growth prompted manufacturers in Thailand to increase production levels with output similarly growing at the second fastest rate in the survey history. The rapid increase in new orders further led to a spill-over into backlogged work, which rose for the first time since December 2021.

“Demand, including from foreign clients, remained robust, which supported the sector’s growth. Furthermore, supply constraints continued to ease, helping cost pressures to subside for Thai manufacturers,” Jingyi Pan, Economics Associate Director at S&P Global Market Intelligence, said.