The manufacturing sector in Thailand is highly competitive due to several factors, such as the abundance of raw materials, low-cost labor, and innovative technologies. The manufacturing industry is one of the main drivers of the Thai economy. Although the manufacturing sector’s contribution to Thailand’s gross domestic product (GDP) in the past decade has been fluctuating, it contributed to approximately 4.4 trillion Thai baht in 2021. Compared to other important economic sectors, the manufacturing sector makes a greater impact on the Thai economy. It accounts for the majority of Thailand’s total exports and generates a large volume of jobs, amounting to almost six million workers in 2021. As of the fourth quarter of 2021, the share of the manufacturing sector in the Thai economic contribution was 34 percent, preceding other major industries like service and trade.
Performance of the manufacturing sector
During the COVID-19 pandemic in 2020, several industries in Thailand were significantly impacted, including the manufacturing sector. Thailand’s exports were stagnant due to severe deflation, lower demand from worldwide buyers, and less manufacturing output in general. This was seen in contractions of the manufacturing production index (MPI), with the lowest index points in the third quarter of 2020. However, public initiatives to promote the manufacturing sector have been introduced to tackle the situation. These include encouraging the cooperation between public and private sectors, funding the manufacturing industry, and supporting knowledge development and new technologies. Earlier in 2022, there were signs of improvement in the manufacturing industry in Thailand, as seen in the purchasing manager index (PMI), which was above 50 index points since January 2022.
Leading segments in the manufacturing sector
Since 1958, the Thai government promoted the private sector to engage in manufacturing. This led to the expansion of several manufacturing segments, such as electrical and electronic appliances, automobile parts, machines and accessories, food and beverages, and chemical products. Recently, electronics and vehicles were the main manufactured goods exported from Thailand. As of February 2022, food products had the highest manufacturing production index (MPI), amounting to 125.09 index points. Interestingly, tobacco products had the lowest MPI despite being one of the most manufactured and exported products in Thailand.
1. Overview
Description: In 2020, the industry sector in Bangladesh grew by 6.5 percent. Contrastingly, the industry sector in the Maldives decreased by 21.3 percent in 2020.
Description: As of the fourth quarter of 2021, the manufacturing sector contributed 34 percent to the economy in Thailand, making the sector the highest contributor in comparison to other sectors. This was followed by the service sector.
Description: In 2020, the compound annual growth rate (CAGR) of business loans in Thailand was highest for businesses under the arts, entertainment, and recreation sector which was estimated at around 17.2 percent. Other sectors with also had high CAGR also include Electricity, gas, steam, and air conditioning along with human health and social activities sector.
Description: In 2021, the manufacturing sector contributed approximately 4.37 trillion Thai baht to Thailand’s gross domestic product, which amounted to around 15.6 trillion Thai baht that year. The GDP contribution of the manufacturing sector has been fluctuating in the past decade.
Description: As of February 2022, electronics accounted for the highest share of manufactured goods exports from Thailand, amounting to 14 percent. Electronics are one of the leading segments in manufacturing sector in Thailand, accompanied by vehicles, agricultural goods, foodstuffs, and machinery and parts.
2. Performance
Description: As of the first quarter of 2022, the capacity utilization rate in Thailand was approximately 66.4 percent, indicating a slight increase from the previous quarter. Industries which contributed to this increase were the manufacturing of sugar, air conditioners, and basic chemical products.
Description: In March 2022, the purchasing manager index of the manufacturing sector in Thailand stood at 51.8 points. This was an indication that the manufacturing sector in the country has improved from the previous month.
Description: As of February 2022, the manufacturing production index (MPI) in Thailand stood at around 98.4 points. In that period, the MPI was the highest for the food product segment, with an estimated MPI of around 125.1.
Description: As of February 2022, the manufacturing production index (MPI) of the food product segment in Thailand was the highest among other segments, standing at 125.09 points. In that period, the overall MPI in the country was 98.43 index points.
Description: As of the fourth quarter of 2021, a survey conducted on the business outlook in Thailand revealed that 80 percent of the respondents stated the unit cost in the manufacturing sector in the country has increased. The same survey also revealed that the prices of products in the manufacturing sector could be somewhat increasing as stated by 54 percent of the respondents.
Description: As of the fourth quarter of 2021, a survey conducted on the business outlook in Thailand revealed that 54 percent of respondents stated that the prices of products in the manufacturing sector could somewhat increase. The same survey also revealed that the unit cost in the manufacturing sector in the country has increased as stated by 80 percent of the respondents.
3. Key segments: production index (MPI)
Description: In the first quarter of 2022, the manufacturing production index (MPI) for electronics increased to 100 points in Thailand compared to the previous quarter. Some of the electronic products that increased in manufacturing were circuit boards and integrated circuits.
Description: In the first quarter of 2022, the manufacturing production index (MPI) for electrical appliances in Thailand stood at 100 index points. During this quarter, the output for air conditioners, cables, and electric wires has increased.
Description: As of February 2022, the manufacturing production index (MPI) of motor vehicles, trailers, and semi-trailers in Thailand stood at 99.91 points. In that period, the overall MPI in the country stood at 98.43 index points.
Description: As of February 2022, the manufacturing production index (MPI) of machinery and equipment in Thailand stood at 112.28 points. In that period, the overall MPI in the country stood at 98.43 index points.
Description: As of February 2022, the manufacturing production index (MPI) of food products in Thailand stood at 125.09 points. In that period, the overall MPI in the country stood at 98.43 index points.
4. Key segments: production
Description: In April 2022, the production volume of fan coil units for air conditioning in Thailand amounted to around 1.1 million units. In 2020, the major producers of electrical appliances in Thailand were small-scale enterprises, accounting for 64 percent of the total market share. Thailand`s manufacturing of electrical appliances is mostly aimed at exports instead of for domestic use.
Description: As of February 2022, the production volume of printed circuit board assemblies (PCBA) in Thailand amounted to around 30.5 million units. In that same month, the production capacity of PCBA in the country was over 58 million units. Most of the electrical and electronics products manufactured in Thailand were for export, as seen in the share of electrical and electronics products exports as of the fourth quarter of 2021.
Description: In February 2022, the production volume of double-cab pickups in Thailand amounted to around 67 thousand units. In that period, the total production volume of automobiles in the country amounted to approximately 155.7 thousand units.
Description: In the first nine months of 2020, the production of soybean oil in Thailand grew by 18.31 percent from the previous year. Due to the coronavirus (COVID-19) pandemic, the demand for ready-made food and food with long shelf life, such as instant noodles and processed food, in Thailand increased.
5. Key segments: exports
Description: In the fourth quarter of 2022, the export value of electronic products from Thailand amounted to around 11.4 billion U.S. dollars. This was an increase of almost 12 percent from the previous quarter.
Description: As of the third quarter of 2021, Thailand’s export value of electrical appliances decreased to approximately 6.7 billion U.S. dollars compared to the previous quarter. In that same period, imports of these products also increased compared to the previous quarter.
Description: In August 2021, the export value of automobiles in Thailand amounted to approximately 12.26 billion U.S. dollars. In that same period, the key export markets of such product were Australia, the ASEAN countries and Middle East.
Description: In 2021, the export value of machinery and equipment in Thailand amounted to 22.5 billion U.S. dollars, indicating an increase from 2020. The value of exports of such products have shown fluctuations in the past years, with the highest value in 2018.
Description: In 2021, the value of processed food exports amounted to approximately 600 billion Thai baht in Thailand. In that same year, processed food products accounted for the majority of food export value in the country.
6. Establishments
Description: In 2020, the number of manufacturing establishments in Thailand amounted to around 72.8 thousand. This was an increase from the previous year. In that year, the number of workers in the manufacturing sector in the country amounted to almost six million.
Description: In 2020, the number of manufacturing establishments with over 1,000 workers in Thailand amounted to 561 establishments. In comparison, there were almost 24 thousand manufacturing establishments with only one to four workers in the country. In that year, the number of workers in the manufacturing sector in the country amounted to almost six million.
Description: In 2020, the number of manufacturing establishments that passed the occupational safety and health inspection in Thailand amounted to around 5.3 thousand. In that year, there were about 373.8 thousand employees in the manufacturing sector passing safety and health inspection in the country.
Description: In 2020, the number of manufacturing establishments that underwent entirely temporary suspension in Thailand amounted to approximately 1.6 thousand. As a result, around 463 thousand employees in this sector were affected.
7. Employment
Description: In 2021, the number of people working in the manufacturing sector in Thailand amounted to almost six million, indicating a slight decrease from the previous year. The labor size in this sector was the highest in 2015, amounting to around 6.45 million in the country.
Description: In 2020, the number of employees in manufacturing establishments with the labor size of over 1,000 workers in Thailand amounted to almost 1.2 million. In that year, the number of workers in the manufacturing sector in the country amounted to almost six million.
Description: In 2020, the number of male manufacturing employees that passed the occupational safety and health inspection in Thailand amounted to around 365.4 thousand. In that year, there were about 5.3 thousand manufacturing establishments passing safety and health inspection in the country.
Description: As of the fourth quarter of 2021, employment in motor vehicle manufacturing in Thailand increased by 18 percent. In that period, the overall employment in the manufacturing sector in the country decreased by 1.2 percent.
Source from Statista.
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