Thailand manufacturing growth eases to 12-month low in May

Manufacturing conditions improve for a tenth successive month.

Thailand’s manufacturing sector continued to expand in May, but the pace of growth eased to its most subdued in 12 months as output gains lost steam, according to the latest purchasing managers’ survey.

The S&P Global Thailand Manufacturing Purchasing Managers’ Index (PMI) edged down to 52.6 in May from 52.7 in April — remaining comfortably above the 50.0 threshold that separates growth from contraction, yet marking the weakest reading since July last year.

The headline figure was dragged lower chiefly by a slowdown in production volumes, which rose at their gentlest rate since May 2025. New orders, however, bucked the trend, picking up pace after an eight-month low in April. Manufacturers attributed the improvement to resilient underlying demand, robust sales pipelines, and the fruits of long-term business development. Even so, some firms reported that clients were hesitant to commit, with certain spending decisions pushed back.

Staffing levels were broadly unchanged for the month, consistent with the cautious hiring trend seen throughout 2026. Capacity pressures remained in evidence, with backlogs of work accumulating for the tenth month running — though the latest build-up was the lightest since August 2025.

Purchasing activity stalled in May, ending an 11-month run of expansion. Stocks of both raw materials and finished goods were only marginally higher on the month.

Supply chain strains persisted, with average delivery times from suppliers again lengthening. Transportation delays were identified as the principal cause of hold-ups in raw material deliveries. The disruption was nonetheless less severe than the 39-month peak recorded in April.

Input cost inflation stabilised after a sharp spike in the previous month, though manufacturers continued to pass higher material and freight costs on to customers, pushing factory-gate prices fractionally higher.

On a more encouraging note, business confidence strengthened markedly. Roughly 21% of the survey panel anticipate a rise in production over the coming year, against just 1% expecting a decline — the most optimistic reading since February and a sharp recovery from the 55-month low struck in March.

Tim Moore, Economics Director at S&P Global Market Intelligence, said manufacturers had achieved a solid upturn in production during May, but that the rate of expansion had continued to lose momentum and was considerably softer than at the close of last year. He noted that client hesitancy was constraining demand growth in both domestic and export markets, and that whilst delivery delays had prompted further stock-building, overall purchasing activity had stalled.