Manufacturing Production Index

Transcription

1 Manufacturing Production Index Overall industrial production has been on a rising trend since July 2017 as illustrated in Figure 1. The most updated data from September 2017 showed a growth in MPI by 4. 2 percent and is expected to remain on an incline until the end of The annual growth rate of industrial production has been on a positive trend since 2014 where it dipped by 3.76 percent and then 0.04 percent in 2015, eventually flipping to a positive rise by 1.6 percent in If the positive trend continues, the MPI for 2017 is expected to rise 2.0 percent from the previous year, as shown in Figure 2. Index Figure 1 Manufacturing Production Index (MPI) f = % = % = % Aug Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct %YOY Figure 2: Annual Growth Rate of Manufacturing Production Index (MPI) f f 2560f Source: Office of Industrial Economics * f = Forecasts by Office of Industrial Economics

2 Manufacturing Production Index September 2017 Industry Index Overview: Production increased by 4.2 percent compared to the same period last year. The rise is constant from August which also saw a 4. 2 percent increase; this is the third consecutive month with positive growth. Auto-Parts Industry: Production of diesel engines increased in line with growing domestic production and consistent growing demand from buyers within AEC, particularly Indonesia and the Philippines. Automobile Industry: Production of pickup trucks grew from minor changes made by manufacturers and partially from purchasing power coming from the first-car buyer incentive scheme resulting in higher domestic sales. Non-Tire Rubber Products Industry: Production of rubber sheets and bars grew as latex supply to the market improved vastly, supporting market expansions and excelled exports to China. Electronic Parts Industry: Production increased in all product segments in line with consistent growing demand from the global market and the positive trend in the Internet of things (IoT). Meat Product Industry: Frozen and chilled chicken meat were a key growth product from increased exports, particularly to Japan which has consistently growing demand after dropping imports from Brazil. Production for the domestic market also grew from increasing popularity of food services and special- cut products in response to segmented consumer demand. Aquaculture Product Industry: Production of frozen fish was key resulting from increased domestic demand to use as ingredients for canned fish products and other processed foods such as frozen cooked fish, and direct distribution to consumers. Industrial Economic Status Forecasts for October 2017 The Manufacturing Production Index (MPI) for October 2017 is forecasted to hit points, a growth rate in the percent range from the same period last year, and a 4.2 percent growth from this September. Key sectors with forecasted growth include non-tire rubber products (from low latex prices leading to purchase for initial processed products and latex gloves as added inventory), automobiles ( from increased demand arising from releases of 2 new car models over the past 2-3 months, coupled with growing purchase orders from abroad for the last quarter of the year and expected growth in domestic sales, leading to increased production and MPI) and automobile parts (following growing exports to the Philippines and Indonesia).

3 Industrial Economic Outlook on 2017 For the remainder of 2017, industry is expected to gradually improve, following driving factors from consistent growth in exports, increased and expanding spending from the private sector and incentives from the public sector. Exports have continued to expand both in terms of product and export markets, and across different sizes of business. The export value of goods in 2017 is expected to grow 8. 0 percent as the world economy grows; electronic products are likely to expand well in the technology cycle. Private consumption in the near term is likely to experience gradual growth, supported by improved income in agriculture, employment in the manufacturing sector for improved export and services and positive results from government initiatives such as the state welfare program and Project 9101 in honour of His Majesty the late King. However, purchasing power is not very strong in the near future as employment and worker incomes have not benefitted from improved exports, partially due to structural changes and less labour- intensive forms of businesses. This is also coupled with high debt burden of households. However, construction of public transport and logistical infrastructure, interest of foreign investors in the Easter Economics Corridor ( EEC) and the trend of rapidly growing digital consumer markets throughout Asia such as India, China and ASEAN, including Thailand, boasts enormous business opportunity which will lead to investment needs in various sectors; this will boost the expansion of private investment in the country. If 2017 goes as forecasted above, the Ministry of Industry forecasts a Manufacturing Production Index or MPI for 2017 to grow in the percent range from 2016 which grew by 1.6 percent.

4 Other Industrial Economic Indicators in September 2017

5 Sep. 16 Oct. 16 Nov. 16 Dec. 16 Jan. 17 Feb. 17 Mar. 17 Apr. 17 May. 17 Jun. 17 Jul. 17 Aug. 17 Sep. 17 Sep. 16 Oct. 16 Nov. 16 Dec. 16 Jan. 17 Feb. 17 Mar. 17 Apr. 17 May 17 Jun. 17 Jul. 17 Aug. 17 Sep. 17 Sep. 16 Oct. 16 Nov. 16 Dec. 16 Jan. 17 Feb. 17 Mar. 17 Apr. 17 May 17 Jun. 17 Jul. 17 Aug. 17 Sep. 17 Report on Industrial Economics Status for September 2017 and October 2017 Forecasts Other Industrial Economic Indicators in September 2017 Thailand s Importation of Industrial Sector Industrial machinery and components Raw materials and semi-finished product (excluding gold) Source: Ministry of Commerce Source: Ministry of Commerce The import of industrial machinery and components in September 2017 was valued USD 1, million which grew by 0. 1 percent from the same month in 2016 from increased imports of transmission engines and components, machines for the printing industry and construction machinery and parts. The import value of raw material and semi-finished product (excluding gold) in September 2017 was USD 6,721.2 million which grew by 10.5 percent from the same month of the previous year, in line with import growth of chemicals, iron, steel and products, electronic appliances and parts and electronics. Thailand s Industrial Production Growth Compared with Major Countries in Asia Growth Rate of Industrial Production China Taiwan Vietnam Thailand Thailand s industrial production grew 4.2 percent in September 2017 compared to the same month last year. This was slower than other major Asian countries where Taiwan, China and Vietnam grew 5.4 percent, 6.6 percent and 17.4 percent respectively. Overall, industrial production in many Asian countries grew from increased exports and the recovering world economy. Source: Data collection by Office of Industrial Economics

6 Status on Industrial Operations Number of factory received the operating licence (factory) Sep. Oct. Nov Dec. Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. 60, , , Investment value (million baht) Sep. Oct. Nov Dec. Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep Source: Department of Industrial Works Source: Department of Industrial Works A total of 461 factories obtained licenses to operate in September 2017, a percent climb from August 2017 (%MoM) and an increase of 1.1 percent from the same month last year (%YoY). The total value of investment from such factories obtained licenses to operate in September 2017 was THB 23,947 million, an increase of percent from August 2017 (%MoM) but a decline of 6.04 percent from the same month last year (%YoY). In September 2017 the automobile repair and assembly industry had the highest number of new licensed factories for operation with 37 factories, followed by the sand/clay digging and scooping industry (31 factories) The industry with the highest value of investment in September 2017 was thermoelectricity valued at 3,388 million Baht, followed by veneer or plywood of all kinds valued at 2,813 million Baht.

7 Status on Manufacturing Operations (continued) Number of Factory Shutdowns (Factory) Sep. Oct. Nov Dec. Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. 15, , , Value of Investment on Shutdown (THB Million) Sep. Oct. Nov Dec. Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep Source: Department of Industrial Works Source: Department of Industrial Works A total of 73 factories ceased operation in September 2017, a decrease from August 2017 by (%MoM) and percent less than the same month last year (%YoY). The value of investment lost on cessation of operation equated to THB 1,615 million, a drop of percent from August 2017 (%MoM) and a drop of percent from the same month last year (%YoY). In September 2017, the sand/clay digging and scooping industry had the highest number of factory shutdowns (6 factories) which was equal to the automobile repair industry (6 factories). This was followed by the gas packaging industry (5 factories). The industry with the highest value of investment with factory shutdowns in September 2017 was the plastic equipment and supplies production industry with 307 million Baht, followed by the engine-automobile repair industry with 182 million Baht.

8 1. Food Industry Industrial Economics Status for September 2017 by Industry Frozen & Chilled Chicken Meat Frozen & Chilled Shrimp Tons Frozen & Chilled Shrimp Tons Frozen & Chilled Chicken Production Sales Exportation (Volume) Production Sales Exportation (Volume) Exports (Million USD) Frozen & Chilled Shrimp Exports (Million USD) Frozen & Chilled Chicken Export (Value) Export (Value) The production and export value of food products increased from last year due to an increase in supply of raw materials and a drive in exports resulting from continuous growth in consumption. Domestic consumption also increased from the positive trend of economic recovery. The production of food products in September 2017 increased by 5.2 percent from the same month last year. The details are: 1) Export-orientated Products: Production of canned pineapples increased by percent from the same month last year from an increase in raw materials, whereas frozen shrimp, canned tuna and processed chicken increased by 14.0 percent, 0.5 percent and 1.0 percent respectively as a result of the government s efforts in resolving IUU fishing, coupled with policies to promote compartments in the poultry industry which has boosted confidence among foreign consumers. 2) Domestic- orientated Products: Production of palm oil, chilled/ frozen chicken and animal ( chicken) feed increased by 28.7 percent, 9.6 percent and 3.4 percent from the same month last year respectively; a result of a continuous rise in domestic consumption Domestic Market: Domestic sales volumes for food products increased by 2.4 percent in September 2017 compared to the same month last year, resulting from a positive economic trend motivating consumption. Foreign Market: The total export of food products in September 2017 increased by 5.6 percent from the same month last year. Key products included sugar, chilled/frozen chicken meat, processed chicken, instant noodles, and processed rice products which increased by 33.7 percent, 19.0 percent, 9.5 percent, 7.7 percent, and 5.2 percent respectively, in response to increased purchase orders from importers. Production and export of food products in October 2017 are expected to increase from the same period last year, as a result of positive factors motivating production of key products such as poultry ( frozen/ chilled/ processed chicken meat) which has seen a constant growth as a result of an outbreak of bird influenza in trade partner countries (Japan, Europe and South Korea) and a loss of confidence in product quality among other exporting markets like Brazil. Furthermore, there has been a positive trend in the seafood category (frozen/ chilled shrimp) resulting from resolutions to the early shrimp mortality syndrome and production slowdowns from competing markets, whereas in the rice product category, trade partners have shown consistent demand growth coupled with a stabilizing domestic and global economy.

9 2. Textile and Garment Industry Million USD Export Value of textile fibers and clothing Tones Production Volume of textile fibers and clothing Thousand Pieces Textile fiber (tones) Clothing (Thousand Pieces) Textile fiber (MUSD) Clothing (MUSD) Production Production of textiles shrank 1.2 percent compared to the same time last year, particularly in yarn products. On the other hand, the polyester segment expanded from the production of special polyester fibers such as collagen and composite fibers to support exports. In addition, the BOI approved promotion of investment in fibers with special properties which has been identified as a potential industry in accordance with the government s textile and garment cluster policy Production of fabrics increased by 0.6 percent to support exports and domestic production of apparel for the next month Garments dropped percent compared to the same time last year, following the decline in direction of domestic sales and exports to major markets Domestic Sales Textile fibers, fabrics and garments decreased by 6.9 percent, 6.2 percent and 14.6 percent in sales, partially due to this period being the last phase that the public wore mourning colours to pay respect to His Majesty King Rama 9, therefore consumers slowed down in purchasing clothes during this time. Exports The export value of textile fibers and fabrics increased by 9.8 percent and 6.9 percent respectively. Fibers have consistently grown over 11 months from November 2016, with the key export product being specialty fibers and fabrics made from specialty fibers. For these product segments, Thailand still has export potential with major markets including China, Vietnam and Japan The value of exports on garments dropped 2.5 percent compared to last year, from a slowdown in exports to USA and EU, where Thailand is at a disadvantage to the generalized scheme of preferences (GSP) in these markets. Forecasts for October Production textile fibers are expected to grow from the manufacturing of specialty fibers to support the positive trend on exports, particularly to Japan, China and Vietnam. Production of textiles and apparel are expected to slow down as exports are still faced with uncertainly, especially in USA and EU where Thailand is not part of the GSP. However, production and exports of women undergarments are expected to grow steadily.

10 Units Units Report on Industrial Economics Status for September 2017 and October 2017 Forecasts 3. Automotive Industry 200, , , , , ,000 80,000 60,000 40,000 20,000 - Automobile Production Industry Monthly Data of Automobile Industry 200, , , , , ,000 80,000 60,000 40,000 20,000 - Motorcycle Production Industry Monthly Data of Motorcycle Industry Sales volume Export volume Production volume Source: Office of Industrial Economics; data collected by Automotive Division, Federation of Thai Industries Automobile production in September 2017 reached 190,272 units, an increase of 7.25 percent from August 2017 (%MoM) and 9.94 percent from the same period last year (%YoY) from a 1 ton increase in production of pickup trucks and derivatives, and commercial vehicles. Domestic sales of automobiles in September 2017 reached 77,592 units, an increase of percent from August 2017 (%MoM) and percent from the same period last year (%YoY) from recovering private investment and an acceleration in disbursement of government budget to stimulate the domestic market. Automobile exports in September 2017 reached 120,654 units, an increase of percent from August 2017 (%MoM) and 7.19 percent from the same period last year (%YoY), due to increased exports of pickup tricks to Oceana, the Middle East, Africa, Europe and North America. In October 2017, the trend of the automobile industry is expected to be steady compared to October 2016 as consumers will delay their purchase of cars for new models to be launched at Motor Expo at the end of the year, however some consumers will purchase models which were just launched in Q3. Sales volume Export volume Production volume Source: Office of Industrial Economics; data collected by Automotive Division, Federation of Thai Industries Motorcycle production in September 2017 reached 172,085 units, an increase of 1.50 percent from August 2017 (%MoM) and percent from the same period last year (%YoY) from an increase in production of all-purpose and sport models. Domestic sales of motorcycles* in September 2017 reached 151,353 units, an increase of 0.18 percent from August 2017 (%MoM) but a decrease of 3.44 percent from the same period last year (%YoY). Motorcycle exports in September 2017 reached 29,914 units, an increase of 1.72 percent from August 2017 (%MoM) and percent from the same period last year (%YoY) from expanding export markets in America, Japan, and Netherlands. In October 2017, the trend of the motorcycle industry is expected to slow down compared to October Note: *Data on sales of motorcycles in August and September 2017 were collected from the Division of Information and Industrial Economics Index, The Office of Industrial Economics as the website containing data is under maintenance.

11 Million tons Million tons Report on Industrial Economics Status for September 2017 and October 2017 Forecasts 4. Cement Industry Clinker Cement Industry Volume of Clinker Cement Production, Domestic Sales, and Exports Cement Industry Volume of Cement Production, Domestic Sales, and Exports Production Domestic sales Exportation Source: 1. Domestic production and sales volume: Information and Communication Technology Center, Office of Industrial Economics 2. Export volume: Information and Communication Technology Center, Office of the Permanent Secretary, Ministry of Commerce Clinker cement production in September 2017 reached 3,654,994 tons, an increase of 5.23 percent from August 2017 (%MoM) and percent from the same month last year (%YoY). Domestic clinker cement sales in September 2017 reached 40,000 tons, an increase of percent from August 2017 (%MoM) and percent from the same month last year (%YoY). Export of clinker cement in September 2017 reached 246,686 tons, a drop by percent from August 2017 (%MoM) and percent from the same month last year (%YoY), due to a slowdown of imports from Bangladesh, Cambodia, Myanmar and Laos. In both Myanmar and Laos, Thai businesses that have invested in production bases have started to operate and produce products since the beginning of the year, leading to less reliance on imports. On the other hand exports to Vietnam grew, whereas exports to the Philippines grew relatively higher. In October 2017, the clinker cement industry is expected to recover compared to the same month last year. Production Domestic sales Exportation Source: 1. Domestic production and sales volume: Information and Communication Technology Center, Office of Industrial Economics 2. Export volume: Information and Communication Technology Center, Office of the Permanent Secretary, Ministry of Commerce Cement production in September 2017 hit 3,287,244 tons, an increase of 7.34 percent from August 2017 (%MoM) and by 2.63 percent from the same month in 2016 (%YoY). Domestic cement sales in September 2017 reached 2,807,759 tons, a drop by 4.39 percent from the previous month (%MoM) but still a growth of 2.32 percent from the same month last year (%YoY), in line with market recovery. Export of cement in September 2017 reached 428,642 tons, a decrease by percent from August 2017 (%MoM) and percent from last year (%YoY) as a result of growth in exports to Bangladesh, Myanmar, Lao, Vietnam, and Cambodia. Both Myanmar and Laos reduced purchase orders as Thai businesses have invested in production bases and commenced operations since earlier in the year. In October 2017, the cement industry is expected to grow as the public will begin to repair their homes and renovate stores as the end of the rainy season approaches and to keep up with the New Year. If acceleration of infrastructure maintains in line with government policy aimed to stimulate private construction, this will be a positive factor for the cement industry to expand.

12 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Aug. 16 Sep. 16 Oct. 16 Nov. 16 Dec. 16 Jan. 17 Feb. 17 Mar. 17 Apr. 17 May 17 Jun. 17 Jul. 17 Aug. 17 Sep. 17 Million USD MPI Million USD MPI Report on Industrial Economics Status for September 2017 and October 2017 Forecasts 5. Electrical and Electronics Industry Electrical Industry Electronics Industry Monthly Data on the Electronics Industry Monthly Data on the Electronics Industry Export value MPI Source: Office of Industrial Economics and Office of Permanent Secretary Ministry of Commerce Production of electrical appliances reached a production index of , a contraction of percent compared to last year. Most product segments contracted including air conditioners with separate condensing units, air conditioners with separate fan coil units, compressors, fans, refrigerators and rice cookers which dropped by percent, percent, percent, 6.17 percent, 4.22 percent and percent respectively. Lower production arose from less domestic consumption, coupled with less purchase orders from foreign buyers. On the other hand, production of electrical motors climbed percent compared to last year. Export of electrical appliances valued at 2, million USD, an increase of 2.78 percent compared to the same month last year. Exports of refrigerators, switch boards and electrical control panels to key markets such as China, Japan and USA increased, whereas the export of air conditioners, a high-value product, dropped percent compared to the same month last year, with exports to ASEAN, EU and USA shrinking percent, percent and percent respectively. The manufacturing production index is forecasted to increase slightly, by 0.83 percent compared to the same period last year, as the production of motors are crucial to power generating equipment and power lines are important for domestic infrastructure Source: Office of Industrial Economics and Office of Permanent Secretary Ministry of Commerce Export volume Production of electronics reached a production index of , an increase of 5.47 percent compared to the same month last year. Key categories included semiconductors, monolithic IC, other IC, HDD and PCBA which grew by percent, 8.92 percent, 1.20 percent, percent and percent respectively, resulting from a growth in global electronic products. Export of electronics valued at 3, million USD, an increase of 7.22 percent compared to the same month last year. Exports to key markets including Japan, China, ASEAN and EU improved. Electronic products with the highest export value were computer parts with a value of 1, million USD, an improvement of 4.22 percent compared to last year, followed by ICs valued at million USD, an increase of 1.53 percent from last year. The manufacturing production index for electronics is expected to increase percent compared to the same month last year, due to an increase in exports for computers and parts, and ICs which are significant for advanced technological development. MPI

13 MPI Import and domestic sales volume (million tons) Report on Industry Economics Status for September 2017 and October 2017 Forecasts 6. Iron and Steel Industry Iron and Steel Industry MPI Domestic sales Import volume Source: Office Of Industrial Economics and Iron And Steel Institute of Thailand The manufacturing production index in September 2017 reached , an increase of 2.28 percent compared to the same period last year. Production of long-formed steel increased by 3.43 percent (wire rods increased percent and high tensile steel by percent) and flat steel increased by 3.89 percent (galvanized steel sheets for automobiles increased by percent), whereas structural steel products dropped 9.16 percent (hot rolled steel structural products dropped percent). Domestic sales volume in September 2017 was 1.39 million tons, a decrease of 1.7 percent compared to last year. Long-formed steel equated to 427,350 tons, a decline by 6.3 percent (wire rods and structural products dropped 16.1 percent), whereas flat steel products increased by 0.4 percent reaching 965,416 tons (hot rolled steel sheets increased by 23.4 percent and cold rolled sheets 10.9 percent). The import volume in September 2017 was 976,599 tons, increasing 0.4 percent. A total of 757,236 tons of flat steel products were imported, an increase of 2.5 percent (hot rolled carbon steel sheets increased by 54.3 percent) whereas 219,363 tons of long-formed steel was imported, dropping 6.1 percent (stainless steel structural products and carbon steel dropped 86.6 percent and 81.4 percent respectively) The trend for the steel industry in October 2017 is expected to increase by only 0.05 percent with structural steel products increasing percent, whereas flat and long-formed steel are expected to decrease 1.29 percent and 0.92 percent respectively from the stable conditions in the construction industry.

14 Report on Industry Economics Status for September 2017 and October 2017 Forecasts