Speeding production in hard disk drive and electric circuit industries accounted for 15 percent of MPI growth.
OIE Director Sophon Pholprasit said that the Manufacturing Production Index (MPI) in the second quarter of this year contracted 1.6 percent, compared to the same period last year.
The capacity utilization rate stood at 69.2 percent, resulting from continuing recovery in the industrial sector after last year’s devastating flood.
As of the end of June, 658 plants or 78 percent of all 839 plants in seven industrial estates hit by the flood have resumed production.
Exports in June rose 3.3 percent year-on-year, mainly driven by auto exports. Electrical appliance exports in the second quarter grew 12 percent year-on-year while electronic exports shrank 17 percent, improved from 23 percent contraction in the first quarter of this year.
The food industry shrank 21 percent, contrary to normal growth earlier due to decreased exports to the European Union countries and the US.
The auto industry in the second quarter grew 46.59 percent year-on-year owing to rapidly rising production to meet overdue orders.
Meanwhile, imports of raw material, excluding gold, shrank 12.1 percent year-on-year, reflecting a possible drop of output in the future while imports of capital goods grew 9.9 percent.
Regarding projections of the industrial growth rate, the OIE sees a 4.5-5.5 percent GDP growth and a 6-7 percent expansion of the MPI. This was attributed to the government’s income-generating policies, including crop pledging scheme, raising the minimum wage and the Bt350 billion loan decree for water management.
On the industrial trend for July, Sophon said that the International Monetary Fund lowered its world economic growth projection to 3.5 percent from its earlier projected 3.6 percent in April, indicating a possible slowdown of Thai industry amid risks from a euro-zone debt crisis.
Thai industrial exports to European markets account for an 11 percent share of the sector, while the export ratio to China, one of Thailand’s major export markets, accounted for 12 percent.
China’s demand for Thai goods may drop after the slowdown of its exports to Europe.