Fourth drop in a row for industry index
The Industrial Confidence Index extended its decline for four straight months in September, as manufacturers are still worried about the global economic downtrend.
Exporters fear that the value of overseas shipments last month was the lowest so far this year.
Payungsak Chartsutipol, chairman of the Federation of Thai Industries (FTI), said yesterday that besides the global economic slowdown, exporters have to shoulder higher production costs. Raw materials are now more expensive, the hike in wages had hit SME employment and the serious flood this year has hampered manufacturing.
The index is derived from producers focusing on the local and overseas markets. Exporters are facing falling orders, which caused their confidence to sink to the lowest level in September, he said.
Electric appliances, electronics, food, and textiles and garments are weighing on manufacturing confidence.
As the export slowdown is predicted to continue, producers have to find new markets abroad to offset falling orders from traditional markets. They also have
to be more aggressive in marketing by launching a “knock on door” strategy with buyers.
However, manufacturers in the East have stronger confidence to further their production as cross-border trade is booming.
The confidence of producers in the Central region, North, Northeast and South has dropped.
The Northeast has slipped much more than the others as concern over the global economic outlook has directly hit manufacturing in the region. The index looking ahead three months is also heading down now, as manufacturers may still be uneasy about orders and production levels. These factors will direct hit their operating results.
Manufacturers agree that the exchange rate is still an important issue dragging the index down while their insecurity in relation to oil prices, interest rates and political affairs has been relieved.
The FTI’s survey also showed that manufacturers want to see the government do more to find financial sources for soft loans to support the cashflow of SME manufacturers. Then the SMEs will be able to invest more in neighbouring countries.
They also want the government to launch measures to assist SMEs whose businesses have been pinched by the government’s policy to extend the Bt300 minimum daily wage nationwide next year, he added.
