Thailand factory output grows at fastest pace this year as PMI climbs to 54.2

Output prices rise for fourth month running as firms hold the line on hiring.

Thailand's manufacturing sector picked up further speed in July, with output expanding at its fastest pace so far this year as new orders flowed in more strongly, according to the latest S&P Global survey.

The headline Thailand Manufacturing Purchasing Managers' Index rose to 54.2 in July, up from 53.6 in June and its highest reading since last December, comfortably above the series' long-run average of 50.5.

Production growth accelerated for a second consecutive month to reach its quickest pace of the year, with manufacturers linking the increase to a faster rise in new orders — itself the strongest in four months. Firms reported more customers placing larger orders, pointing to a broader improvement in underlying demand. New export sales grew for a third straight month, though the pace of growth eased slightly to the weakest in the current run of expansion, remaining solid by historical standards.

Employment was little changed for much of 2026 so far, with staffing levels held steady in July even as backlogs of work rose for a twelfth consecutive month, albeit at their slowest rate in that sequence. Manufacturers responded to stronger production needs by stepping up purchasing activity at the fastest pace since March, whilst stocks of purchases were roughly flat and post-production inventories fell for a second month running.

Supply chains stayed broadly stable, with average lead times on inputs lengthening only marginally — the slowest such increase since December — and purchase prices barely higher than the month before. Output charges rose for a fourth consecutive month, continuing the trend seen since April, though at a more moderate pace than in June.

Phil Smith, economics associate director at S&P Global Market Intelligence, said Thailand's manufacturing sector had begun the third quarter strongly, with output and new order growth continuing to build. He noted signs that healthy demand was allowing firms to improve profit margins, even as they kept overheads tightly controlled and staffing broadly stable despite mounting backlogs. He added that business confidence had recovered further from March's low, though it remained below levels seen around the turn of the year, which he put down to lingering uncertainty over the global economic outlook.

Growth expectations for the year ahead improved slightly again in July, with sentiment above the long-run average amid reports of healthy sales, plans for new products and marketing pushes, and hopes of winning fresh customers.