FTI identifies 3 main drags on Thai industrial growth

Thansettakij•Economy•2d ago

Reader Briefing

The Federation of Thai Industries reports a K-shaped recovery in the second quarter of 2026 with significant disparities between industrial sectors and business sizes.

•The Thai economy grew by 1.9% in the second quarter of 2026.
•The industrial confidence index for July showed a gap between large enterprises (105.5) and small enterprises (75.3).
•The average capacity utilization rate for the second quarter was 57.47%, a 3.2% decrease from the previous year.
•The Federation of Thai Industries proposes 'Buy Thai' and policy unlocking measures to boost industrial GDP.

Overview

•The Thai economy expanded by 1.9% in the second quarter of 2026, though the Federation of Thai Industries notes the recovery is K-shaped.
•In July, the Thai Industrial Sentiment Index (TISI) reached 109.0 for electronics but fell to 59.7 for chemicals, the only group with a continuous decline.
•Private investment grew by 13.4% in the second quarter of 2026, accelerating from 10.1% in the first quarter.
•Low capacity utilization is attributed to export growth being concentrated primarily in electronics while other sectors remain limited.
•The Federation of Thai Industries proposes the Buy Thai project to stimulate demand for high-employment goods like textiles, footwear, and furniture.
•The Federation of Thai Industries suggests unlocking production limits by conditionally allowing the export of surplus oil and accelerating government construction projects using Made in Thailand (MiT) criteria.
•Increasing the capacity utilization rate by 5 percentage points to 62.5% could increase industrial GDP by approximately 140,000 million baht or 0.7% of GDP.
•Investment in technology, AI, and Data Centers is increasing, but only about 42% of approved projects in the first half of the year used domestic raw materials.

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Key Entities

Person

Pimjai Lee-issaranukul(พิมพ์ใจ ลี้อิสสระนุกูล)

President of the Federation of Thai Industries.

Organization

Federation of Thai Industries(สภาอุตสาหกรรมแห่งประเทศไทย)ℹ️

The organization analyzing Thai industrial trends and proposing economic measures like Buy Thai.

Policy

Buy Thai

A proposed project to create internal demand for finished goods with high employment and excess capacity.

Made in Thailandℹ️

Criteria promoted for use in government construction projects to revive orders for steel and construction materials.