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Industry sentiment falls again in July

Industry sentiment falls again in July

TUESDAY, August 25, 2015

The Thai Industries Sentiment Index (TISI) fell for the seventh straight month in July amid the economic slowdown, according to the Federation of Thai Industries (FTI).

The government should accelerate disbursements for investment projects and increase the capacity of small and medium-sized enterprises, Supan Mongkolsuthee, president of the FTI, said yesterday.

The index in July dropped to 83.0 from 84.0 a month earlier, both well below the 100-point baseline. The risks to the confidence index remained the economic slowdown, domestic consumption weakening and export shrinkage.

Thailand’s exports have confronted contractions from the slowing economic recoveries of its major trading partners. Its exports of fishery products could also be affected in the long term, as the United States has kept Thailand in Tier 3 of its "Trafficking in Persons" report despite the Thai government’s insistence that it has been trying to solve this problem.

Both public and private agencies have cut their estimates for Thai economic expansion and export growth for the latter half of 2015. The businesses surveyed by the FTI viewed the current economic slowdown as an opportunity for improvement of production efficiency and product development as a way to increase competitiveness and cope with a future recovery.

The July TISI survey covered 1,202 businesses in 43 groups of the FTI.

The sub-index on three-month expectations rose to 101.2 in July from 99.0 in the previous month.

The businesses surveyed were more concerned about the global economy and domestic political developments and less about foreign-exchange rates, oil prices and interest rates.

According to the survey, operators want the government to accelerate disbursement of the investment budget and proceed with its projects to prop up the economy, along with tax measures for more private spending.

SMEs should also be promoted for product development and improvement of production efficiency.

Whole trade negotiations with high-potential countries should also be done for market expansion and to lower trade barriers. Another survey conducted by the FTI and Nida Poll on SMEs found that most of them wanted the government to speed up solving the country’s economic problems, particularly the high cost of living and low prices of agricultural products, and to stimulate tourism. Skill training and technological and knowledge development should also be promoted.

Surapong Paisitpattanapong, spokesman of the FTI’s Automotive Industry Club, said July’s vehicle production rose 9.6 per cent year on year to 165,863 units thanks to more production of new pickup-truck models and eco-cars for export.

From January to July, automobile production slipped 0.21 per cent to 1.10 million units from the same period of last year. Production of passenger cars in July climbed 10.81 per cent year on year to 65,005 units on a 19.19-per-cent jump in exports.

In the first seven months of this year, passenger-car production edged up 7.32 per cent to 461,729 units, equivalent to 41.93 per cent of total vehicle production.

Production of 1-tonne pickups went up 8.42 per cent year on year to 98,545 units in July and rose 5.88 per cent to 623,181 units or 56.6 per cent of total auto production in the first seven months of this year.

July’s auto production for exports increased 6.58 per cent year on year to 100,843 units or 60.8 per cent of total production in the month. Its seven-month production for exports inched up 4.42 per cent to 683,449 units or 62.07 per cent of total auto production.

However, domestic car sales in July dropped 12.5 per cent year on year to 60,863 units.