Soft new orders undercut the Thailand factory sector in April, reported S&P Global late last week.

The headline Thailand manufacturing purchasing managers index (PMI) fell to 49.5 in April, down from 49.9 in March, and slipping further below the 50-mark that separates growth from contraction, reported S&P Global, citing its monthly survey.

"Central to the latest fall of the (PMI) headline index is a reduction in new work. Incoming new business declined at the quickest pace since last April, on the back of subdued economic conditions," said S&P Global.

Also denting new orders in April was the end-of-March earthquake that struck Thailand, collapsing a Bangkok tower under construction and rattling nerves, and slumping export demand, reported S&P Global.

Despite soft new orders, Thailand factory managers beefed up payrolls and worked through backlogs in April.

"Thai manufacturers worked through existing orders to support a third monthly rise in production. Firms also hired additional staff for the first time since last November to cope with ongoing workloads," advised S&P Global.

In part, Thailand manufacturers added to payrolls in April in anticipation of expanded production in the coming months despite global trade tensions. "Sentiment among firms remained positive and manufacturers were strongly optimistic that output can expand in the year ahead. Manufacturers also hired additional staff to support operations in April, reflecting their conviction that production growth can be sustained," said S&P Global.

Thailand factory managers also experienced widening profit margins in April. "Despite the reduction in input prices, Thai manufacturers opted to raise charges for the first time in eight months to reflect past increases in costs," noted S&P Global.

Ongoing trade tensions may impact Thailand's factory sector.

Thailand's gross domestic product (GDP) should expand by 2% in 2025 if global trade tensions are eased, and by 1.3% if a higher tariff scenario prevails, the Bank of Thailand estimated on April 30.

The Thailand April manufacturing PMI was compiled by S&P Global from surveys sent to 400 manufacturers from April 9 through April 22.