By Suttinee Yuvejwattana
Sept. 30 (Bloomberg) -- Thailand’s industrial production fell for a 10th straight month in August, suggesting the nascent global economic recovery isn’t strong enough to increase demand for Asian goods.
Manufacturing output dropped 10.3 percent from a year earlier after a revised 7.1 percent decline in July, Amara Sriphayak, a Bank of Thailand director, said in Bangkok today. The median estimate of 15 economists in a Bloomberg Newssurvey was for a 6.4 percent contraction.
“The recovery in exports is not broad based and sustained yet and that may hurt manufacturing,” said Pimonwan Mahujchariyawong, an economist at Kasikorn Research Co. in Bangkok. “We still have concerns about the economic recovery in the fourth quarter as global indicators are still sending mixed signals.”
Thailand’s recession will ease this quarter and the economy will resume growth in the last three months of this year on public spending and a revival in global demand, the finance ministry said this week. The improvement in economic indicators will be “gradual,” even as exporters continue to receive orders, Amara said today.
“Don’t expect all indicators to run up all the way,” she said. “They increased markedly earlier. They need to adjust in line with demand.”
The deepening decline in manufacturing last month was partly due to “temporary” causes, as petroleum and tobacco production declined amid factory-maintenance shutdowns and food production was affected by a shortage of materials, Amara said.
Thai companies including Halcyon Technology Pcl and CSP Steel Center Pcl have said they expect third-quarter sales to rise on improving orders. Demand for electronics and hard-disk- drive exports “should support production in the fourth quarter,” Amara said.
Exports, which are equivalent to about 60 percent of Thailand’s economy, dropped 17.9 percent to $13.2 billion in August from a year earlier, the central bank said today. Shipments plunged 25.7 percent in July.
Thailand’s imports fell 33.8 percent last month to $10.9 billion after a revised 32.1 percent drop a month earlier. The trade surplus in August widened to $2.27 billion from $799 million a month earlier.
An index of business sentiment rose to 46.1 last month, compared with 45 in July, the central bank said. The reading hasn’t exceeded 50, a level that suggests the mood is improving, since April 2004.
The current-account surplus widened to $1.92 billion in August from a revised $539 million a month earlier. The measure comprises the difference between exports and imports of goods, services, investment income and remittances. Trade makes up about 70 percent of the current account, and tourism contributes most of the service industry’s 30 percent component.
Tourist arrivals dropped 5.3 percent from a year earlier to 1.15 million last month.