Thailand Industrial Output Drops 3.10 Percent in June 2026

The Ministry of Industry reported that Thailand's industrial output contracted for the third consecutive month in June 2026. The manufacturing production index (MPI) fell 3.10 percent year-on-year, the steepest decline since November 2025. This contraction was primarily driven by reduced production in the automotive and petroleum sectors.

Officials attributed the decline to high inflation and volatile energy and freight costs linked to the protracted Middle East conflict. For the second quarter of 2026, the MPI decreased 1.79 percent year-on-year, with capacity utilization averaging 57.47 percent.

Government stimulus programs, including a copayment and cost-of-living initiative, helped maintain demand for consumer staples such as cosmetics and soap, as well as electronics. However, the Office of Industrial Economics warned that uncertainty regarding U.S. import tariffs and continued disruptions in the Bab el-Mandeb Strait and Red Sea pose ongoing risks to Thai supply chains and logistics.