Industries sentiment sinks

Meanwhile, Thai exports of vehicles in July this year fell by 25.4 per cent.

Total domestic sales of vehicles in July was at 98,251 units, down 25.4 per cent from July 2012; total vehicles in June this year stood at 106,000 units, down 14.2 per cent from the same period of last year, the FTI reported.

The FTI has set the domestic vehicles production target for this year at 2.55 million, an increase of 3.92 per cent over the same period of last year. Of the vehicles produced, 1.15 million will be for exports and 1.4 million will be for domestic sales. Last year, Thailand produced a total of 2.45 million vehicles, 1.44 million of which were sold domestically.

According to Payungsak Chartsuthipol, chairman of the Federation of Thai Industries (FTI), the Thai Industries Sentiment Index (TISI) in July dropped to 91.9 from 93.1 in June, the lowest in the past seven months.

Main causes

The main causes for the decline of the TISI figure were weaker domestic purchasing power, the political situation, flash floods in several provinces and the sluggish global economy, which reduced the Thai export volume.

By regions, the index in the South was the lowest at 84.5 in July, down from 86.0 in June, due to the declining price of rubber and oil palm, plus the shortage of raw material to produce processed foods besides the unrest in the deep South.

The FTI expects the TISI figure to fall to 97.2 in the next three months, from 98.7 in June due to lower orders, sales, production outputs and drop in business operations results due to higher production/operation costs.

The TISI figure was derived from surveys conducted by the FTI on 1,011 businesses covering 42 industrial sectors.

Payungsak said that most operators in the survey wanted the government to launch measures to stimulate domestic economic growth to boost purchasing power and speed up the development of mega-projects. They also wanted the government to improve the customs process in the border areas, and ensure political stability.