Bangkok: The industrial index for June 2026 contracted by 3.1%, with the second quarter seeing a contraction of 1.79%, as reported by the Office of Industrial Economics (OIE). The Industrial Production Index (MPI) for June 2026 was recorded at 94.99, reflecting a capacity utilization rate of 57.61 percent. Businesses are advised to urgently manage their risks, according to OIE.

According to Thai News Agency, Mr. Supakit Boonsiri, Director of the Office of Industrial Economics, disclosed that the decline in the MPI is largely due to contractions in the automotive and petroleum sectors. The ongoing conflict in the Middle East has contributed to volatility in energy and transportation prices. While the second quarter's MPI stood at 95.96, a 1.79% contraction, domestic demand for consumer goods such as sugar and cleaning products showed signs of gradual recovery, supported by government measures like the "Thai Helps Thai Plus" project.

Looking ahead, the economic and industrial early warning system for July 2026 indicates an initial "normal signal," driven by domestic support, including ongoing government projects. Nonetheless, external factors, including the Middle East conflict and US import tariff uncertainties, pose risks. The OIE warns that an escalation could disrupt shipping lanes, further affecting logistics and supply chains.

The OIE recommends businesses to diversify raw material sources, manage costs, and embrace digital technology to mitigate risks. Additionally, structural changes to reduce dependence on imported materials and promote local content are advised to enhance competitiveness.

Mr. Supakit also highlighted that Minister of Industry, Mr. Varawut Silpa-archa, has directed the OIE to revise the industrial index to better reflect the current industrial structure and support future development policies.