Industry sentiment plummets for sixth consecutive month

Supan Mongkolsuthee, president of the FTI, said the TISI edged down to 84.0 in June, the sixth consecutive monthly decline, from 85.4 in May. Scores below 100 indicate low confidence.

Industrialists continued to have concerns over the domestic economy that has been affected by slow consumer spending, widespread drought that hit farm income and consequently farmers’ ability to purchase manufactured products, and the problems faced by Thailand’s trading partners. Companies have therefore been cautious with business operations and investment.

June’s TISI was based on a survey of 1,203 manufacturers in 43 industries. About 81.7 per cent of respondents were focusing on domestic markets and the rest on foreign markets.

Some respondents noted expansion of cross-border trade, which has sustained exports.

The sub-index on expectations for the next three months also dropped to 99.0 in June from 100.9 a month earlier.

In June, operators surveyed had more concerns over the global economy and the domestic political situation, but decreased worries over foreign-exchange and lending rates.

They also suggested that the government accelerate its spending as planned as a way to boost domestic consumption through fiscal stimulus and relief measures for farmers affected by drought. Small and medium-sized enterprises should also be assisted with an increase in liquidity through financial institutions’ soft loans.

Surapong Paisitpattanapong, spokesman of the FTI’s Automotive Industry Club, said June’s vehicle production dropped 5.11 per cent year on year to 151,698 units after some auto companies’ model changes for pickup trucks, but production rose 12.33 per cent month on month. From the beginning of this year to June, production inched down 1.77 per cent to 935,251 units.

Vehicle sales in June totalled 60,217 units, down 18.4 per cent year on -year but up 5.75 per cent month on month. Vehicle exports in June plummeted 26.14 per cent year on year to 76,774 units as new pickup-truck models have not reached full production yet.

Surapong said this year’s vehicle-production target had been cut by 100,000 units to 2.05 million, while the export target remained the same at 1.2 million units or 58.54 per cent of total production.

Motorcycle production is expected to meet the target of 2 million units. Of the total, 400,000 units are expected for exports and 1.6 million are forecast for domestic sales.