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Industrial sentiment dips for second straight month

Mar 16. 2016
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THE THAI Industries Sentiment Index (TISI) fell for the second straight month to 85.1 in February, amid the country’s widespread droughts and global economic problems.
Supan Mongkolsuthee, president of the Federation of Thai Industries, said yesterday that the drop reflected concerns over slowdowns in regional demand and purchasing power, and investors’ caution in expanding their operations.
February’s TISI survey on 1,201 operators in 44 industries found that consumer products for daily life continued to see consistent demand, as manifested by fattening order books and sales in the food, sugar, palm-oil, cosmetics and chemical industries. 
The three-month sentiment index stayed at 100.1, slightly down from 100.8 in January, as businesses remained worried about risks to the economy, which could affect operations over the next three months.
The main ones were tightening liquidity of small and medium-sized enterprises, likely long and severe droughts, foreign-exchange volatility and political conflicts in other countries.
Businesses see public investment and public consumption as the |key mechanisms to drive the |Thai economy amid a slowdown in private consumption in the second quarter. 
Public spending is expected to lead to more private consumption and investment, while the government’s financial measures could help businesses gain access to sources of working capital.
Last month, businesses showed more concern over the global economic situation, foreign exchange and lending rates, while expressing less concern over the domestic political situation and global crude-oil prices.
The businesses urged the government to expedite its investment in infrastructure projects as scheduled and expand exports into new markets as a way to lessen the country’s dependence on export destinations that have economic issues. 
Product innovation for higher value-added, plus support for the digital economy and e-commerce, should also be promoted.
Last month, the sub-indices for all sizes of industries witnessed drops. Small industries edged down from 78.0 to 77.1, medium industries from 86.8 to 84.5 and large industries from 94.3 to 92.7. Scores under 100 indicate low confidence.
Surapong Paisitpattanapong, spokesman for the FTI’s Automotive Industry Club, said vehicle production slipped 7.1 per cent year on year to 166,412 units in February, but rose 12.7 per cent from the previous month.
Of total auto production in February, 62.9 per cent was for exports. The number of units produced for export fell 5.6 per cent year on year to 104,679.
Among vehicles made for export in February, the number of passenger cars inched down 6.8 per cent year on year to 37,816 units and 1-tonne pickup trucks declined 4.9 per cent to 66,863 units.
In February, 37.1 per cent of all autos produced were for domestic sales. There were 61,733 of them, down 9.5 per cent from the same month of last year.
Of domestic sales of locally made vehicles in February, passenger cars amounted to 22,743 units, down 28.2 per cent year on year, and 1-tonne pickups accounted for 37,074 units, up 9.2 per cent.
In February, 206,468 motorcycles were made, down 14.4 per cent from the same month of last year.
February’s exports of autos, engines, auto parts and spare parts rose 11.6 per cent year on year to Bt76.40 billion, but exports of motorcycles, parts and spare parts slumped 8.7 per cent to Bt5.48 billion.

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