Thailand Industrial Output Falls More Than Expected

Thailand’s industrial production dropped 0.80% year-on-year in May 2026, worse than market expectations of a 0.48% decline. It marked the second consecutive month of contraction in industrial production, following an upwardly revised 0.94% fall in April, which was the steepest decline since last November, amid higher oil prices, rising transport costs, and shortages of some raw materials due to disruptions caused by the Middle East conflict. The decline was mainly driven by lower automotive production and elevated inflation. Monday's data showed that car production plunged 17.94% from a year earlier in May. Last month, Thailand's industry expected factory output to increase by 1.0% to 2.0% for the full year, down from the earlier forecast range of 1.5% to 2.5%.

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.