Thailand Industrial Output Falls More than Expected

Thailand’s industrial production fell 0.04% year-on-year in February 2026, reversing an upwardly revised 1.64% gain in the previous month and defying market expectations of a 2.3% rise. This marked the first annual decline since November 2025, driven by a drop in petroleum output due to temporary maintenance shutdowns at several refineries, while car production also eased, according to Supakit Boonsiri, head of the ministry’s Industrial Economics Office. He forecast a modest increase in industrial output for March, underpinned by higher production of air conditioners, food, and beverages over the summer. However, geopolitical uncertainties stemming from tensions in the Middle East have added pressure to logistics and energy expenditures, with effects expected in the coming months. The government plans an oil tax cut to mitigate the impact of rising oil prices. Meanwhile, Mr. Supakit said the ministry will review its 2026 output forecast in May, currently projecting 1.5–2.5% growth.

Thailand’s industrial production rose 1.46% year-on-year in January 2026, surpassing the expected 0.9% gain and following a 2.52% increase in December. This marked the second consecutive month of growth, driven by ongoing expansion in automotive output and heightened activity ahead of the February general election. Automotive production climbed 6.3% annually, supported by domestic demand for hybrid EVs and BEVs, while electronics output, including printed circuit boards and integrated circuits, surged 18.2% on strong global demand. Palm oil production also jumped 67.3% due to higher yields boosting market supply.Meanwhile, the industrial sector faced headwinds from a decline in inbound tourism and a stronger baht, which weighed on the competitiveness of Thai products. Looking ahead, factory activity is expected to expand 1.5–2.5% in 2026, supported by steady trade with key partners, government stimulus measures, and a shift toward looser monetary policy.

Thailand’s industrial production unexpectedly grew 2.52% year-on-year in December 2025, outperforming forecasts of a 0.9% drop and recovering from a downwardly revised 3.85% fall in November. It marked the strongest growth in industrial production since April 2024, boosted by auto production, industrial export growth, and government measures. Output expansions were seen in basic iron and steel (15.54%), electronic components and boards (10.52%), automotive (5.02%), food (2.20%), computers and peripherals (0.75%), and petroleum refining (0.55%). Meanwhile, production contractions were recorded in apparel production excluding garment stores (-7.81%), and rubber & plastics (-0.95%). However, for the full year of 2025, the index fell 0.78% as the strong baht eroded Thailand’s export competitiveness. On a monthly basis, industrial output rose 2.33% in December, after a downwardly revised 1.66% drop in November.