Thailand's outward trade contracted 3.12 percent YoY again in March in line with the declines in purchase orders from ASEAN-5, China and Australia, despite signs of increased new orders coming from the US, EU, Japan and CLMV.
Although our shipments contracted 1.00 percent YoY in 1Q14, and 1.03 percent YoY – or 2.8 percent YoY if gold exports were excluded – in 4Q13, many export categories began to exhibit signs of recovery, thanks to stronger demand from such potential markets as CLMV and the Middle East amid growing purchasing power in the US, Japan and EU. As a result, our industrial product exports, including computers/related equipment/components, electronics, electrical appliances, passenger cars/components, textiles and plastic pellets/products continued to grow in recent months and should help bolster export growth ahead.
We at KResearch are maintaining our growth forecast for Thai exports in 2014 at 5.0 percent, or within 3.0-6.0 percent. However, that figure may be revised if 2Q14 shipments do not perform as well as hoped for given the fact that our export recovery will be facing several challenges such as uncertainty in demand from major trade partners, escalating tension between Russia and the West, plus the slowing Chinese economy. These factors will not only inhibit new orders for Thai products, but also dampen global commodity prices, as well.
In addition, intense competition from rivals, procurement problems for some raw materials for the manufacture of certain export products, plus a lack of confidence among trade partners toward production and/or delivery of orders from Thai sources may necessitate Thai exporters to adjust some strategies to cope with volatility over the remainder of the year.