Thailand Industrial Output Growth Below Estimates

Thailand’s industrial production increased 2.05% year-on-year in September 2026, below expectations for 2.8% growth, marking the third consecutive month of expansion, though at the slowest pace in the sequence. The increase was driven mainly by higher output in the electronics and circuit board sectors (27.28%) and computers and peripherals (8.38%), supported by demand for AI- and data center-related products. However, ongoing conflict in the Middle East, intense competition from low-priced imported goods, and high household debt continued to pose challenges, with the latter constraining domestic purchasing power. For the third quarter, industrial production rose 3.40%. Last month, Thailand’s Industry Ministry revised its forecast for factory output growth in 2026 to a range of 2.75% to 3.55%, up from the previous forecast of 0.0%–0.5%, and its forecast for industrial GDP growth to 0.8%–1.8%, up from 0.75%–1.75%, after changing its methodology.

Thailand’s industrial production expanded 4.44% year-on-year in August 2026, surpassing expectations for a 1% rise, accelerating from an upwardly revised 3.97% growth in July and marking the second straight month of increase. The increase was boosted by higher electronic output, government stimulus, and a weaker baht. Communication equipment surged 24.41% year-on-year, driven by global AI investment and data center infrastructure. Supakit Boonsiri, head of the Ministry’s Office of Industrial Economics, said the ministry had revised its Manufacturing Production Index (MPI) methodology, adding new electronics products and changing the weightings to reflect the country’s new economic structure. Thailand’s Industry Ministry revised its forecast for factory output growth to a range of 2.75% to 3.55% in 2026, up from the previous 0.0%–0.5%, and industrial GDP growth to 0.8%–1.8%, up from the previous 0.75%–1.75%.

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.