Thailand factory activity rebounds in February
Backlogs continue to rise as new order inflows are broadly stable.
Thailand's manufacturing sector showed signs of recovery in February 2025 with the Purchasing Managers' Index rising to 50.6 from the previous month's 49.6, latest data from S&P Global said.
The PMI rose to 50.6 in February from January's 49.6, indicating improved manufacturing performance.
"The survey data for Thailand rebounded somewhat in February following a blip at the start of the year. Most promisingly, output increased at the fastest rate in six months. Although the new orders sub-index remained just below 50.0, signalling broadly unchanged demand, the index has registered above its long-run trend level of 48.8 for the past ten months. This included a strong rise in December, which continued to translate into rising backlogs of work in February," said Trevor Balchin, Economics Director at S&P Global Market Intelligence, said.
After a slight downturn in January, production levels rebounded, and whilst new orders and employment remained stable, backlogs of work increased. Companies stepped up their purchasing activities to restock essential materials, benefitting from lower average input prices due to bulk buying. Firms maintained a positive outlook for the next 12 months, anticipating the acquisition of new customers.
This growth figure has shown positive readings in eight of the last ten months. The overall enhancement in the sector was attributed to increased output and longer delivery times from suppliers, whilst employment figures remained steady. New orders hovered around stability, with inventory levels slightly reduced compared to January.
Manufacturing production experienced a solid increase in February, reversing a decline from the previous month. Higher output was driven by work on existing orders and productivity gains, with growth rates marking the strongest performance since August 2024, aligning with long-term trends. Although new orders did not fully expand, they were generally stable, with some manufacturers attributing rises to new product lines amidst competitive pressures.
Despite the challenges with new orders, the level of unfinished work rose for the ninth time in ten months, albeit marginally. Goods producers continued to deplete their finished goods inventory for the record twelfth consecutive month. Manufacturers raised output without increasing their workforce, indicating productivity improvements.
Purchasing activity picked up as firms sought to replenish stock, with the volume of inputs ordered rising slightly for the first time in five months. However, total input stocks fell for a record 17 months, and supplier delivery times extended for the fourth consecutive month, often due to shipping delays.
Cost pressures decreased, with average input prices falling for the first time in four months, although the reduction was modest. Output prices also declined slightly for the third month.
Looking ahead, the manufacturing outlook remains robust, driven by expectations of customer growth, new product development, and efficiency improvements, as confirmed by Trevor Balchin of S&P Global Market Intelligence.
