14-6-2023 (BANGKOK) Thailand’s industrial sector faced another challenging month in May as industrial confidence dipped for the second consecutive month. The Thailand Industry Sentiment Index (TISI) fell to 92.5, down from April’s 95.0, according to data released on Wednesday by the Federation of Thai Industries (FTI). The decline in confidence was driven by lower demand from trade partners, reflecting the prevailing global economic uncertainty.
All components of the TISI experienced a decrease, including purchase orders, sales, production volume, operation costs, and turnover, further indicating the prevailing headwinds faced by the sector. FTI Chairman Kriengkrai Thiennukul attributed the worsening figures in May to the prolonged slowdown in Thai exports, which was aggravated by higher energy prices and financial costs. Additionally, consumers’ cautious spending due to concerns over household debt contributed to the challenging economic climate.
However, there were some positive factors that provided support to the industrial sector. Rising demand for industrial products, driven by the thriving tourism-related industries and China’s economic recovery, offered a glimmer of hope amidst the downturn, as highlighted by Kriengkrai during a news conference.
Looking ahead, the three-month TISI, which indicates the industry’s outlook for the upcoming period, slightly decreased to 104.3 in May from 105.0 the previous month. Entrepreneurs expressed concerns about the potential impact of minimum wage increases on operating costs for small and medium-sized enterprises, which could potentially deter foreign investment. Kriengkrai stressed the importance of a swift government formation to alleviate mistrust among investors and avoid a power vacuum that could further destabilize the economy.
The TISI reading was based on a survey conducted among 1,327 respondents from 45 industry groups affiliated with the FTI.
