Thailand manufacturing PMI improves in August, still remains below 50-point mark

Thailand’ manufacturing sector witnessed improvement during the month of August, with the Purchasing Managers’ Index (PMI) enhancing, although it remained slightly below the 50-point mark that separates expansion from contraction in an industry.

The Nikkei Thailand PMI improved to a four-month high of 49.8 in August, compared to 49.3 in July. This indicated only a fractional deterioration in Thai manufacturing operating conditions, Nikkei reported.

Further, Thai goods producers reported increased output in August, which ended a two-month sequence of contraction. Meanwhile, new export orders rose during August, the seventh time this has been the case since data collection began last December.

The rate of purchasing activity slumped in August, with the rate of decline quickening to the joint-sharpest in the series history, yet was only marginal overall. There was some evidence that lower input buying was linked to efforts to reduce stock levels. Subsequently, a decline in preproduction inventories was recorded in August.

"Looking ahead, output looks likely to grow after the first accumulation of backlogs of work was reported since February," said Samuel Agass, Economist, IHS Markit.