The Office of Industrial Economics (OIE) expects the Manufacturing Production Index (MPI) in 2019 to rise 2-3% from 2018, thanks to full-year implementation of the flagship Eastern Economic Corridor (EEC) scheme and the upcoming general election.
Nattapol Rangsitpol, OIE's director-general, said the EEC and the general election will create positive sentiment for the country and increase confidence from business operators and investors.
But the OIE said the US-China trade war remains a negative issue pressuring the country's economy.
The OIE expects the utilisation rate this year will increase to 68.4%, up 1.6 percentage points from the end of 2018. The rate remains high because of demand for industrial products from domestic and overseas markets.
The OIE projects GDP in the industrial sector will grow 3-4% in 2019.
"We will monitor the trade war as it will impact many industrial sectors in the country, especially exports," said Mr Nattapol.
The OIE forecasts the country's automotive and components sectors will remain sunrise industries in 2019, even though exports will drop slightly.
"In 2019 car exports are expected to decline by 3.56% to 1.10 million vehicles, but local car sales for the period are expected to offset a contraction in output," he said.
For the steel industry, the OIE expects domestic capacity in 2019 will rise by 2.9% year-on-year to 17.9 million tonnes on a number of construction projects, especially five EEC megaprojects -- a high-speed railway connecting three airports, Map Ta Phut port, Laem Chabang port, an aviation maintenance, overhaul and repair centre, and the U-tapao airport.
Yesterday the OIE reported the 2018 MPI stood at 115.08 points, up 2.8% from 2017 and in line with the OIE's projection at 2.5-3%.
