Einar H. Dyvik
Research expert covering Nordics and global data for society, economy, and politics
Manufacturing sector in Thailand - statistics & facts
With nearly 10 percent of the population employed in the manufacturing sector, spanning from electronics to agricultural goods and machinery, the industry serves as one of the primary drivers of the Thai economy. Thailand’s manufacturing sector is highly competitive due to several factors, including abundant raw materials, low-cost labor, and innovative technologies. Although the manufacturing sector's contribution to Thailand's GDP has fluctuated over the past decade compared to other important economic sectors, the industry has a great impact on the Thai economy. It accounts for the majority of Thailand’s total exports and around a third of the Thai economy, ahead of the services sector.
The government's commitment to the growth of the manufacturing industry has helped Thailand establish itself as one of the region's foremost manufacturing centers. Driven by its leading automotive production, electronics and food processing industries, Thailand’s manufacturing sector will continue to drive the Thai economy.
Brief history of Thailand’s manufacturing sector
Before 1958, the Thai government and state enterprises were responsible for overseeing the production of industrial goods in Thailand. At that time, Thailand imported a significant quantity of auto parts and electronic components from overseas. To develop the industrial sector, the government passed legislation to promote the industry, allowing the private sector to begin manufacturing. This led to the expansion of several manufacturing segments, such as electrical and electronic appliances, automobile parts, machines and accessories, food and beverages, and chemical products. In 2022, the United States was the largest export market for electrical appliances from Thailand, followed by ASEAN countries and the European Union. The main manufactured goods exported from Thailand were electronics and motor vehicles as of April 2024. Agriculture, foodstuffs, and machinery and equipment followed. Furthermore, machinery and equipment scored second for manufacturing production index points (MPI). Government initiatives helped improve Thailand’s manufacturing sector
Relying heavily on exports, the manufacturing industry is still suffering from the economic effects of the COVID-19 pandemic. This ranges from severe deflation to lower demand from global buyers and less manufacturing output in general. The country’s year-on-year MPI growth plummeted and hit rock bottom in the third quarter of 2020. However, as of the first quarter of 2024, the production index witnessed a decent rise compared to the previous year. Therefore, the Thai government introduced more initiatives to promote the manufacturing sector. This included encouraging collaborations between the public and private sectors, funding the manufacturing industry, and supporting knowledge development and new technologies. The Thai manufacturing sector has seen a steady improvement since the beginning of 2023, as the purchasing manager index (PMI) continues to climb.The government's commitment to the growth of the manufacturing industry has helped Thailand establish itself as one of the region's foremost manufacturing centers. Driven by its leading automotive production, electronics and food processing industries, Thailand’s manufacturing sector will continue to drive the Thai economy.
