Local output down almost 50 per cent

Local manufacturers have gradually reduced production, which dropped almost 50 per cent in the first two months before exports began collapsing last

year.

The Industrial Economics Office yesterday said the Kingdom's Manufacturing Index contracted 23.07 per cent last month on top of 25.6 per cent in January. As a result, capacity use among manufacturers had now been cut almost in half on average.

The global financial crisis has directly affected both exports and manufacturing. Domestic consumption has also fallen, due to the effects of the global crisis.

The auto industry is one of the hardest hit by the economic crisis.

Its production contracted 50.64 per cent last month, against 35.59 per cent in January.

Director-general Arthit Wuthikaro said the drop in auto manufacturing resulted mainly from two reasons: falling car exports and domestic sales; and local consumers waiting to learn the government's policy on reducing excise tax. As a result, auto production dropped to 41.75 per cent of capacity last month.

The decline in auto manufacturing has directly hit small and medium-sized parts manufacturers, due to reduced orders.

In addition, manufacturing in the electric and electronics industry, particularly air-conditioners, dropped 57.62 per cent, against 39.33 per cent in January. However, hard-disk drives and electronics production were on the upswing, growing more last month than in January.

Arthit said manufacturing had contracted for five consecutive months and that this was expected to continue until the third quarter.