Thailand Industrial MarketView Q2 2018
01 Oct 2018
Manufacturers Upgrade Rather Than Buy More Land, SILPs Sales Stable
The macroeconomic numbers were positive for the manufacturing sector. In Q2 2018, exports to all major markets grew by 10.32% Y-o-Y. The Manufacturing Production Index (MPI) increased by 3.6% Y-o-Y. The Thai automotive industry saw an expansion in car production of 11.1% Y-o-Y. The figures given by the BOT (Bank of Thailand) for FDI in the manufacturing sector in Q2 2018 were more than nine times higher than the FDI in Q2 2017 but SILPs sales did not increase significantly. Our assumption is that manufacturers are upgrading their equipment and machinery in their existing facilities rather than buying more SILPs and constructing new buildings or renting RBFs.
There were some signs of increased demand for Serviced Industrial Land Plots (SILPs) in Q2 2018, as sales of SILPs by major developers, excluding Rojana, increased by 1% Y-o-Y and 0.15% Q-o-Q, with 187 rai (74 acres or 30 hectares) sold. There was no new supply in this quarter, which kept the total supply at approximately 157,000 rai (62,000 acres or 25,100 hectares). We will have to wait and see whether continued growth of FDI in the manufacturing sector will finally lead to an increase in demand for SILPs and RBFs.
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