The Office of Industrial Economics (OIE) is revising down the country's manufacturing production index (MPI) and industrial GDP as the global economic outlook remains poor, according to the OIE's director-general Verasak Supprasert.
Mr Verasak said the OIE would announce its new forecasts this month, when the MPI is expected to be revised down from the previous forecast of 2%-3% and industrial GDP would be cut from the earlier forecast of 2.5%-3.5%.
"We need to revise down the indices because the economic prospects on the domestic and global fronts remain poor and that has rendered our earlier forecasts unrealistic," he said.
In the first nine months of this year, the country's MPI rose 0.06% to 108.32, slightly up from 108.26 in the same period of last year.
The rise is well below the forecast of 2%-3%.
For the third quarter alone, the MPI dropped 0.5% from 106.57 in the same period of last year to 106.07.
"Several sectors have seen a decline in production. In some industries the production capacity has dropped significantly," said Mr Verasak, adding that the production capacity of the automotive industry fell by 9.54% in September as carmakers revised down their production plans to match the tepid economy.
In the third quarter alone, the production capacity of the automotive sector declined by 2.5% from the same period of last year to 483,356 units due to weaker demand from both the domestic and overseas markets.
Meanwhile, the production capacity of the garment and textile industry dropped by 8.28% due to weakened demand from major export markets such as Europe, Japan and the Middle East, where the economies are also facing a slowdown.
However, the OIE expects the garment and electronics sectors to play a bigger role in supporting the MPI for the full year.
"The Industry Ministry expects strong demand for black garments will continue to rise from now until the first and the second quarters of next year. This would help compensate for the fall in exports in the garment sector," he said, referring to the black clothes that Thais will wear for several months to mourn the passing of His Majesty the King.
Likewise, demand in the electronics sector is also expected to rise in the last quarter of this year, especially in Asean, the US and Europe.
Ittichai Yotsi, director of the Bureau of Industrial Economic Research, said he expected rising demand in the neighbouring countries of Cambodia, Laos, Myanmar and Vietnam would help boost the MPI in the last quarter of the year.
He said the government is pinning hopes on the policy to promote the Eastern Economic Corridor (EEC). The project spanning three eastern provinces is intended to form a new engine to drive economic growth.
Mr Ittichai said the EEC would not only help support the overall economy but ensure the MPI and industrial GDP would not fall too low.
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