Thailand Industrial Output Shrinks for 1st Time in 5 Months

Thailand’s industrial production unexpectedly fell 0.36% year-on-year in April 2026, defying market expectations of a 0.2% rise and reversing an upwardly revised 1 .3% increase in the previous month. It was the first decline in industrial production since last November, mainly weighed down by a drop in automotive manufacturing, amid higher oil prices and disruptions caused by the ongoing Middle East conflict. Thailand’s industry ministry said that the war in the Middle East and higher costs pressured industry profits. Tourism, a key economic driver, also weakened, impacting related industries. Monday’s data showed car production dropped 0.44% from a year earlier to a near six-year low of 103,794 units, primarily due to disruptions in export markets stemming from the ongoing war in the Middle East. However, the outlook for May should improve on a month-on-month basis. Thai factory output for the full year was seen up 1.0% to 2.0%, lower than the 1.5% to 2.5% range seen earlier.

Thailand’s industrial production rose 0.75% year-on-year in March 2026, edging higher from a revised 0.09% increase in the previous month and beating expectations for a 1.0% decline. The improvement was driven by stronger petroleum and automotive output alongside resilient exports. Growth was also supported by a smooth government formation, which helped sustain policy continuity and ongoing project execution. However, gains were tempered by persistent external headwinds, including geopolitical tensions and trade protectionism weighing on global demand and trading partner confidence. Rising energy and freight costs linked to Middle East tensions continued to pressure production expenses, while stronger import competition added strain on domestic manufacturers. The central bank’s steady rate stance and cautious outlook further underscored a still-fragile external environment despite the upside surprise.

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.