Purchasing power decline tops concerns of chief execs
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CEO sentiment index sinks to 2 pts
Top executives are concerned most about declining purchasing power amid rising production costs, according to the CEO Sentiment survey.
A raft of adverse factors depressed the CEO sentiment index to 2 points, and possibly to 1 point next month – a sharp decline from 39 points in the first quarter of this year.
They include the slowing global economy, rising baht, rising cost of living, rising household/consumer debt and the government’s hazy economic policies.
The survey for June-July sentiment was conducted by Krungthep Turakij and Dhurakij Pundit University Research Centre from June 3-15 with 433 corporate executives responding.
Concern over lower purchasing power tops the list of things that worry executives for June-July. Lower domestic demand and the economic environment earned only 4.1 points, while costs of raw materials and the volatile exchange rate both scored 3.7 points. Labour cost received 3.4 points.
Executives are concerned that the rising cost of living and rising household/consumer debt have weakened consumer purchasing power in the past six months.
This comes as most businesses struggle with liquidity problems brought by rising production costs. Most businesses have had to cut back on investment and expansion, which could have boosted competitiveness for long-term growth and prospects.
The liquidity crunch means businesses are more susceptible to risks that they could normally cope with if domestic demand, consumer purchasing power and production costs were in balance.
With this economic and operating environment, Thailand’s competitive edge could be dulled, Kiatti-anand Luankaew, director of the Dhurakij Pundit University Research Centre, said yesterday.
Indices pertaining to operations comprise four aspects – income, production/operating costs, liquidity and employment. This month, the income index dropped to 5 points and is expected to fall further to 1 point next month, in line with the economic index.
The production/operating cost index this month rose to 48 points and is heading to 52 points next month.
The rise of this index in the past two quarters has depressed the liquidity index to -3 points this month and likely to -7 next month. The employment index this month was at 4 points, equal to May, but is expected to fall to -2 points next month.
