Reuters

Thailand released a mixed bag of October data and surveys yesterday, indicating the country’s economic recovery remains patchy though the central bank said there was “broad-based improvement” last month.

While the Bank of Thailand’s private investment index rose from September, one for consumption slipped and annual industrial output dropped in October – the 19th straight drop.

Southeast Asia’s second-largest economy is recovering slowly after the army took power in May. The junta has approved infrastructure projects, but the benefits are expected to start next year.

Exports, a key growth engine, are doing better. On Wednesday, the Commerce Ministry said October shipments rose a higher-than-expected 3.97% year-on-year.

The central bank said its consumption index, up 1.1% in September, declined 0.3% last month.

“The overall consumption picture is still negative because of weak auto sales, which show no sign of recovery soon,” Roong Mallikamas, a senior central bank director, said. “But spending on non-durable items increased.”

The central bank said private consumption and tourism “continued to recover” while public spending accelerated and factory output rose from September.

The Industry Ministry said output was 2.87%, lower than last October, more than the 2.25% drop forecast in a Reuters poll and less than September’s 3.92% decline.

Factories’ capacity utilisation was 60.68%, after 61.1% in September.

The long streak of annual output declines should now end, according to the Industry Ministry.

Udom Wongviwatchai, head of its industrial economics office, predicts annual gains for this month and December. He said output is expected to fall 4% this year before rising 3-4% next year.

The economy grew 0.6% in July-September from a year earlier, and only 0.2% in 2014’s first nine months. The state planning agency sees 1% growth this year.

The Finance Ministry has said October-December annual growth will be more than 4%. But that high a figure would reflect a low comparison base, as political turbulence flared in the final quarter of 2013.

Barbanas Gan, economist with OCBC in Singapore, said while data has been encouraging, the recovery “may have come a tad too late to allow GDP growth to see a significant uptick.”

He said he has pencilled in 0-0.5% growth in 2014, and 4% next year.Workers assemble a car at a Mitsubishi Motors plant in Laem Chabang. Thai factory output in October was 2.87%, lower than last year.

 

Related Story