Industrial sentiment dips in September

The Thai Industries Sentiment Index (TISI) continued to decline to 87.1 points in September, in part because of the impact of severe flooding and slow economic growth.
The index, which gauges business confidence among manufacturers, stood at 87.7 points in August, down from 89.3 points in July.
Nava Chantanasurakon, vice-chairman of the Federation of Thai Industries (FTI), attributed the dip in September to floods in the North, Northeast and parts of the central region.
The inundations ravaged houses and buildings, farmland, industrial areas and tourist spots, causing damage estimated at between 30 and 50 billion baht to the economy, he said.
The FTI is calling on the authorities to adopt better flood prevention measures to brace for the impact of freak weather patterns.
“The government should develop a disaster warning system that provides accurate and real-time alerts via mobile phones,” said Mr Nava.
“Cooperation with neighbouring countries is needed to better conserve forests located in watershed areas as this can help prevent flash floods and mudslides.”
Other factors that contributed to the drop in the September TISI include the state’s slow budget spending.
As of September, only 63.3% of the budget had been disbursed. This affected the construction sector as sales of construction materials to state projects slowed down.
Other industries also faced a tough time. During the first eight months of this year, domestic car sales plunged by 24% year-on-year while sales of motorcycles dropped by 11%.
Sluggish car and motorcycle sales resulted from the high level of household debt which caused banks to be more selective about granting auto loans. It has become more difficult for prospective car and motorcycle buyers to obtain loans as banks are worried over non-performing loans.
Many local industries are struggling to deal with the influx of low-cost Chinese products while exporters of farm produce and food products were affected by the baht’s appreciation against the US dollar.
“The Thai currency appreciated to 33.52 in September, up from 34.92 in August this year,” said Mr Nava.
“We expect the baht’s value to stand at a more suitable level of 35.”
According to 1,353 entrepreneurs surveyed for the September TISI, most of them were worried about the domestic economy, which gained the votes of 67%, followed by concerns over the baht’s appreciation (48%).