Logistic Market 2H 2024

Thailand’s economy in the second half of 2024 was primarily driven by exports, which grew by 9.9% Y-o-Y, following a 11.7% Y-o-Y expansion in H1. Strong global demand for rubber, computers, and machinery played a pivotal role in boosting exports, leading to a trade surplus of 363.7 billion baht in H2. At the same time, import growth moderated to 8.2% Y-o-Y, down from 10.3% in H1, as domestic demand for steel, copper, aluminum, and medical products weakened.

Private consumption remained resilient, increasing by 3.9% Y-o-Y, supported by steady spending on services and non-durable goods as a result of the government’s cash transfer program. Fixed capital investment also maintained an upward trajectory, expanding by 5.6% Y-o-Y, largely due to higher public infrastructure spending, despite a more cautious approach to private sector investment in machinery and equipment. Additionally, government expenditure surged by 7.4% Y-o-Y in H2, a sharp rebound from the 0.29% Y-o-Y increase in H1, as increased public investment helped stimulate economic activity.

In H2 2024, headline inflation stood at 1.0%, while core inflation remained stable at 0.6%. The increase was primarily driven by higher prepared food and energy prices, with the removal of diesel subsidies contributing to rising energy costs, despite a decline in Dubai crude oil prices. However, inflation remained among the lowest in ASEAN, as government subsidies on electricity and cooking gas helped contain overall price pressures.

Looking at the indicators related to logistics, statistics from the Office of Industrial Economics (OIE) indicate that the production index declined from 97.10 in June 2024 to 93.95 in December 2024, reflecting a moderate slowdown in industrial output. At the same time, the finished goods inventory index decreased from 102.95 to 93.28, signaling lower stockpiling activity and potentially weaker demand for warehouse storage. This combination of declining production and reduced inventory levels indicated that while consumption and trade have supported logistics activities in the short term, future projections for industrial production and warehousing demand remain cautious.

Despite these challenges in the industrial sector, the logistics market continued to demonstrate resilience, reflecting its critical role in supporting trade and supply chain operations. According to the Trade Policy and Strategy Office, new business registrations in logistics grew by 5.2% Y-o-Y, driven by freight transportation and cargo handling activities, which remain essential for domestic and international trade. Foreign direct investment (FDI) in logistics reached 7.87 billion baht, with China, Japan, and South Korea emerging as the top investors, particularly in road freight and customs brokerage services. While manufacturing-driven warehouse demand may soften, logistics infrastructure investment and transportation services remain key drivers of sectoral growth.

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