Index shows decline in manufacturers' confidence
Manufacturers' confidence has waned because of the ongoing crisis in Europe, rising production costs and local political uncertainty, according to the Thai Industries Sentiment Index (TISI), while vehicle production increased substantially.
Suparat Sirisuwannangkoon, chairman of the Federation of Thai Industries’ automotive industry club, said yesterday that the TISI dropped to 102.7 in June, down from 106 in May. The decrease in TISI is the result of the decline in the number of orders, sales, output and profits.
The factors denting manufacturers’ confidence in June were a rise in production costs and concerns about political instability and natural disasters, Suparat said.
In addition, the persisting European economic crisis affected Thai exporters. Direct exports to Europe had been hit but also shipments of raw materials and semi-finished products to other markets for re-export to Europe, he said.
However, as the TISI was over 100, it indicated that entrepreneurs’ confidence was still positive.
They believe that the Thai economy is strong and can continue to grow, he said.
For a three-month outlook, the index was at 105.8 in June, down from 111.1 in May, he said.
"Surveys show that entrepreneurs are most worried about the global economic situation, political uncertainty, volatility of exchange rates, and the trend of high oil prices and high interest rates," Suparat said.
Entrepreneurs are urging officials to take action to help them mitigate the impact of the global economic woes. They suggested that the government help them find new markets in such places as India, Asean and the Middle East to compensate for the decline in European markets.
They said credit should be made available with more lenient conditions and loan amounts should be increased. Furthermore, steps should be taken to ensure that businesses could cope efficiently with the increase in the national minimum wage to Bt300 per day. The government could provide training programmes and tax incentives to offset the rise in labour cost.
They also urged the government to review its subsidy policy for agricultural products and address the quality of such products.
Suparat also said passenger-car production in June jumped 57 per cent to 82,806 units.
He also said all types of vehicle production in June increased 33.81 per cent year on year to 205,600 units.
The production of passenger cars between January to June increased 18.91 per cent to 357,295 units, while combined vehicle production rose 30.47 per cent to 1.1 million units.
Vehicle production for exports in June rose 6.32 per cent to 88,183 units and for domestic sales jumped 33.81 per cent to 205,600.
