Thailand Industrial Output Unexpectedly Rises

Thailand’s industrial production unexpectedly grew 0.46% yoy in July 2026, recovering from a downwardly revised 2.38% decline in June, beating expectations for a 1% fall and marking the first increase in four months. The rebound was mainly driven by industries aligned with technological trends, particularly the electronics sector, which expanded alongside the growth of AI and digital infrastructure, with computer and peripheral production surging 28.23%. Meanwhile, petroleum refining products rose 9.12%, and sugar jumped 28.30%. However, the conflict in the Middle East remains a factor requiring close monitoring, as it contributes to energy price volatility and raises production and logistics costs for the industrial sector. Furthermore, a slowdown in foreign tourism could affect related sectors, such as the food and beverage industry. Thailand’s Industry Ministry revised its forecast for factory output growth to a range of 0.0% to 0.5% for 2026, from 1.0% to 2.0% previously.

Thailand’s industrial production fell 3.10% year-on-year in June 2026, following an upwardly revised 1.30% decline in May, marking the third consecutive month of contraction. It was the steepest decline since last November, amid higher oil prices and rising freight costs due to disruptions caused by the Middle East conflict. The decline was mainly driven by weaker production of automobiles (-12.59%), petroleum products (-7.97%), and apparel (-8.99%). Latest data showed that car production fell 7.55% from a year earlier in June. Meanwhile, palm oil production also slumped 33.2% year-on-year. However, continued growth in demand for electronics and technology-related products helped limit the decline, with production of computers and peripherals rising 2.5%. For the first half of the year, industrial production fell 0.4% from a year earlier. Thailand's Industry Ministry maintained its forecast for factory output growth of 1.0% to 2.0% this year. Monthly, industrial output fell 2.37%.

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%.