Thai manufacturing sees slowest growth in five months

Manufacturers slashed selling prices during the period due to competition.

Thailand's manufacturing sector saw its slowest growth in five months, with its S&P Global Thailand Manufacturing Purchasing Managers' Index falling to 52.7 in January from 57.4 in December.

Production and new orders both continued to expand, albeit at slower rates than at the end of 2025. Companies attributed the growth to better customer demand and successful promotional efforts. However, export orders fell again as subdued foreign conditions dampened international demand for Thai manufactured goods.

Despite the moderation, domestic resilience underpinned the sector's performance. Rising new work inflows led to a further accumulation of backlogs, prompting manufacturers to hire additional staff to cope with the workload. Employment rose for a consecutive month.

Purchasing activity continued to grow in response to higher production requirements, with firms also acquiring more raw materials to replenish stocks. This resulted in the first expansion in inventories of raw materials since July 2025.

The most striking development came in pricing dynamics. Whilst input costs rose for a third successive month—driven by higher prices for raw materials and semi-finished products—the rate of inflation softened to marginal levels. Supply chain performance deteriorated only slightly.

In stark contrast, selling prices plunged at the quickest pace since August 2020. Manufacturers reported that strong competition and efforts to offer discounts to support sales drove the price reductions, raising concerns about sustained margin pressure and its impact on profits.

Forward-looking indicators remained encouraging, however. The indices for new orders, backlogs of work and future output all pointed to the likelihood of continued production growth in the coming months. Overall sentiment stayed positive, with manufacturers hopeful that business expansion plans and improving economic conditions would support sales over the year ahead.

Jingyi Pan, economics associate director at S&P Global Market Intelligence, said the sector remained in expansion in January. "Although the rate of improvement softened from the end of 2025, it was positive to see resilient domestic demand underpinning the latest rise in production and spurring a renewed increase in headcounts," she noted. "On prices, margin pressure lingered as Thai goods producers further lowered average selling prices despite rising costs. The impact on profits will therefore need to be closely monitored."

S&P Global Market Intelligence forecasts GDP growth of 1.8% for Thailand in 2026.