Consumer confidence rebounds in December
AMID THE government’s spending-stimulus measures and rising crop prices, along with a more positive outlook for the economy, Thai consumer confidence increased for the first time in three months in December, according to a survey by the University of the Thai Chamber of Commerce (UTCC).
The Consumer Confidence Index climbed from 72.3 points in November to 73.7 last month. A level below 100 still reflects weak consumer sentiment, however.
That said, higher confidence is good news for the retail industry, as consumers believe it is the best time in three months to buy a new house or new car or to travel, and for small and medium-sized enterprises to invest and expand.
Thanavath Phonvichai, director of the UTCC’s Economic and Business Forecasting Centre, said yesterday that the consumption sector should gradually brighten this year, especially in the second quarter. Although people still worry about the economy, they foresee better growth in the near future from recovering exports and an improved global economy, as well as higher crop prices.
“Consumer confidence in the first quarter may fluctuate as people are still concerned about the price of goods, but it will be on the rise in the future as there are no serious negative factors. Global economic growth has recovered, while exports have edged up, and prices of many crops, such as palm, sugar cane and rubber, have increased after the rising global price of oil.”
However, consumers are still somewhat worried about the current flooding in the South, and the impact of Brexit once the United Kingdom gets out of the European Union officially.
The UTCC also expects gross domestic product this year to grow by 3.6 per cent as investment increases, export growth strengthens, and more foreign travellers visit the country.
Based on 2,244 responses to its survey last month, the university found other indices reflecting consumer confidence also increased for the first time in three months, including future incomes from 88.8 points in November to 90.3 in December, and future employment opportunities from 66.9 to 68.2.
Meanwhile, the Office of Small and Medium Enterprises Promotion (OSMEP) reported that the Trade and Service Sentiment Index for SMEs in November declined, but the index for the next three months increased.
Salinee Wangtal, director-general of the OSMEP, said the index went down from 91 points in October to 84.8 points in November as the trade and service sectors reported lower profits and sales.
However, the index for the next three months increased to 101.6, showing that enterprises were optimistic of future spending during the high season from the end of 2016 to early this year.
The government’s tax breaks to stimulate shopping and travelling should also help boost spending and growth of SME businesses, she said.
