BANGKOK, April 1 (Xinhua) -- Thailand's manufacturing sector continued to expand in March, thanks to a stronger increase in new orders that in turn lifted output amid higher demand and new client inflows, a survey showed on Wednesday.
The Southeast Asian country's manufacturing purchasing managers' index (PMI) came in at 54.1 last month, up from 53.5 in February, marking the strongest improvement in overall operating conditions since last December, according to S&P Global.
A PMI reading above 50 indicates expansion in the manufacturing sector, while a reading below 50 reflects contraction.
Despite ongoing demand-side strength putting pressure on factory capacity in Thailand and contributing to another rise in backlogs of work, employment registered a marginal decline for a second month running, S&P Global said in a statement.
Meanwhile, Thai firms raised their purchasing volumes, leading to a slight gain in input inventories amid extended supplier delivery times.
As for prices, the March survey noted that operating expenses virtually remained unchanged, but output prices saw a modest reduction for the fourth straight month.
Increased backlogs and a sustained uplift in purchasing activity pointed to continued potential for the upside, said Joe Hayes, principal economist at S&P Global Market Intelligence.
However, Hayes warned that the current growth path is at risk due to potential supply-side shocks, particularly if global supply constraints and high prices for imported production inputs such as oil and gas persist.
This vulnerability is highlighted by a sharp drop in the future output index to a four-and-a-half-year low, indicating that Thai goods producers anticipate a much more challenging outlook for the manufacturing sector, he added. ■
