BANGKOK : Thailand’s manufacturing production index (MPI) in May dropped by a less than expected 3.14 per cent from a year earlier as exports remained sluggish, the industry ministry said on Friday.

The figure compared with a forecast in a Reuters poll for a fall of 4.5 per cent in May. Output contracted a revised 8.71 per cent year-on-year in April.

In the January-May period, the MPI declined 4.49 per cent from a year earlier, the ministry said in a statement.

Last month, it forecast factory output would show zero to 1 per cent growth this year.

While exports remain soft, domestic demand has increased, driven by strength in the crucial tourism sector and higher investment, it said.

Industrial goods account for about 80 per cent of total customs-based exports, which dropped by a less than expected 4.6 per cent in May from a year ago.