Industrial confidence lowest in six months, FTI reports
The Thai industrial confidence index in July dropped to 98.7 points, the lowest in six months, indicating concern over the prolonged debt problem in the euro zone. Combined with a slowing Chinese economy, the euro crisis could have indirect impacts on the
Payungsak Chartsutipol, chairman of the Federation of Thai Industries (FTI), said the July index dropped from 102.7 in June. It was based on a survey of 1,050 industrial operators in 42 sectors. Scores below the 100 baseline indicate low confidence.
He said the industrial sector had felt the pinch from rising costs of raw materials and a labour shortage in some sectors.
By sector, the confidence index of those in export-oriented sectors, especially the food and rubber segments, dipped to 93.0 from 94.3 in June, reflecting their concern on a possible decline in orders, sales and financial performance. Their confidence for the next three months, however, surged to 104.1, up from 97.3 in June, as operators believe they will be able to adjust to risk factors from international markets.
By region, the confidence index for operators in the Central part was 94.6, down from 101.2 in June, on concerns over the prolonged euro crisis. The index for the North fell to 96.1 from 103.1 on the impacts from the rise in the price of liquefied petroleum gas, the minimum-wage increase, and labour shortages. For the South, the index dropped to 94.6 from 101.5 on concerns over the prolonged euro crisis and violence in the southernmost provinces.
Industrialists also said the rising price of fuel was a risk factor in July. About 58.7 per cent of the respondents said this would severely hit their businesses, up from 41.8 per cent of respondents in June. Four price adjustments took place in July, eventually increasing the price of all grades of gasohol by 90 satang a litre, 91-octane petrol by Bt2, and diesel by 70 satang.
Most operators wanted the government to promote border trade with neighbouring countries and boost their financial liquidity, providing easier access to loans for those who might face declining product orders. They also called for action to solve the labour shortage in some sectors.
Payungsak said the FTI wanted the government to prepare export promotions for next year in case the problems in the euro zone drag on even longer, as well as seeking more export opportunities from the upcoming Asean Economic Community.
