Manufacturers brace for tough 2026

Sector facing raft of obstacles this year

- LAMONPHET APISITNIRAN

A promotional model greets visitors at an exhibition booth during the 42nd Thailand International Motor Expo 2025. Thailand's automotive industry will continue to face challenges in 2026 despite an improvement late last year.

(PATTARAPONG CHATPATTARASILL)

Thailand's manufacturing sector is bracing for a difficult start to 2026, as political uncertainty, sluggish domestic demand and structural challenges continue to weigh on the economy.

Industry leaders warn that unresolved problems such as household debt and cheap imports could prolong the sector's struggles, despite government efforts to stimulate growth.

The prolonged process of holding a general election and forming a new government limits the ability of the caretaker administration, led by Anutin Charnvirakul, to make decisive policy moves. Key economic measures and budget allocations for some projects remain stalled, leaving businesses in limbo.

"Renewed political uncertainty in early 2026 could slow budget spending and economic activity," said Kriengkrai Thiennukul, chairman of the Federation of Thai Industries (FTI).

He cautioned that manufacturers may face yet another exhausting year as the broader economy shows little sign of robust recovery.

The FTI expects Thailand's manufacturing sector to continue to slow in 2026, particularly small and medium-sized enterprises (SMEs).

Many SMEs are still grappling with financial difficulties and have not fully recovered from the impact of the pandemic. Liquidity shortages remain a pressing concern, leaving businesses vulnerable to external shocks.

Foreign competition adds to the pressure. Local manufacturers are struggling against an influx of low-cost imports, especially from China, which erodes domestic competitiveness.