Business confidence up in November despite economic woes
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Despite the floods, business confidence looking ahead three months increased in November, the Bank of Thailand reported.
“Businesspeople expected that production and purchase orders would improve in the next three months,” said BOT senior director Mathee Supapongse.
The three-month-expectation Business Sentiment Index (BSI) surged to 54.4 in the central bank’s November survey from below 50 a month earlier. A reading above 50 means a gain in confidence.
The current BSI also rose to 39 in November from 36.7 in the previous month.
The economy shrank sharply last month, battered by the historic floods. The crisis had a severe impact across all economic sectors, Mathee said.
The agricultural sector contracted by 7.2 per cent year on year because of damaged rice crops in the Central region, he said.
Manufacturing continued to shrink in almost all industries because of a temporary shutdown of production in flooded areas, together with impacts through disruptions in supply chains and transport, he noted.
The Manufacturing Production Index contracted 48.6 per cent year on year to 97.9, below the base-year level. Hard-hit industries included hard disk drives, automobiles, integrated circuits and parts, and electrical appliances.
The Private Consumption Index contracted across almost all indicators by 1.6 per cent. The drop was felt particularly in cars, with the index for that sector shrinking 55.8 per cent year on year in November.
The 71.5-per-cent contraction in commercial car sales caused the Private Investment Index to shrink by 1.3 per cent year on year.
Mathee said an increase in jobless claims signalled a rising unemployment rate. However, the situation is expected to be temporary because of labour shortages in several industries. The recovery in the production sector will likely restore the labour market to its normal condition.
