Thailand's Manufacturing Production Index (MPI) in July increased by 1.7% year-on-year to 96.7 points, driven by various factors including the 2024 Olympics and growing exports, says the Office of Industrial Economics (OIE).
The Olympic Games in Paris played a key role in boosting production as manufacturers received more purchase orders, said Krit Chansuwan, deputy director-general of the OIE.
"The Olympics drove sales of food and beverages as well as oil, while the tourism industry continued to grow," he said.
The increase in the July MPI was also attributed to export growth, which hit the highest level in 28 months since March 2022.
The government's efforts to speed up budget spending, aiming to inject money into the economy, also caused the index to inch up, said Mr Krit.
However, from January to July, the MPI decreased by 1.48% year-on-year to 97.7 points, with capacity utilisation tallying 59%.
The OIE said negative factors affecting the MPI included weak consumer purchasing power, the economic slowdown, a high level of household debt, costly energy expenses, and the influx of low-cost products into the Thai market, which undermined local manufacturers.
The Joint Standing Committee on Commerce, Industry and Banking warned earlier if the government does not establish new measures to better protect Thailand against inexpensive Chinese products, more Thai companies could shutter because of the competition.
During the first half this year, 667 factories closed, a year-on-year increase of 86.3%, according to the Federation of Thai Industries.
The OIE said a major contributor to the July MPI uptick was palm oil manufacturing, which increased by 35.9% based on higher palm output and exports to India, Pakistan and Europe at a time when global palm oil prices were high.
The production of rubber products increased by 14.7% year-on-year, driven by more purchase orders of medical gloves and auto parts for cars and motorcycles.
However, car manufacturing decreased by 11.1% year-on-year in July as banks continued to tighten lending criteria for auto loans, wary of non-performing loans.