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Thailand coup damaging its manufacturing sector

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Political unrest in Thailand is harming the nation’s manufacturing sector, according to official figures released on Wednesday.

The Wall Street Journal reports that, according to Thailand’s Office of Industrial Economics, the manufacturing production index shrank 3.9% from the year-earlier period, compared with March's 10.4% contraction.

The result means that the index is at its lowest point since December 2011 and that the sector has now contracted for 13 consecutive months.

More broadly, the Thai economy slowed in the first quarter. Data released earlier this month showed that it shrank by 2.1 per cent from the previous quarter.

From an Australian perspective, the political instability has renewed the belief that Electroloux’s decision to relocate its manufacturing operations from Orange, NSW to Thailand could be reversed.

The Central Western Daily reports that Australian Workers’ Union (AWU) western region organiser Alan Haynes believes the turmoil will make Thailand less attractive to foreign investors.

“The Electrolux board would be feeling very nervous about future operations in Thailand,” Mr Haynes told the Central Western Daily.

“Australia is a politically and economically stable country, the workforce is already here (at Electrolux in Orange), and it was a profitable plant even during the GFC (global financial crisis).”

He added that there could be a civil war in Thailand.

“... I’d hate to see that happen but if it does it will make it very difficult to get product out of Thailand,” Haynes said.

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