World Economy

Thailand Industrial Sentiment at 7-Month Low

Thailand Industrial Sentiment at 7-Month LowThailand Industrial Sentiment at 7-Month Low

Thailand’s industrial confidence continued to fall to a seven-month low in April, mainly as a result of worries over sluggish economic conditions, the Federation of Thai Industries (FTI) said Monday.

According to the monthly survey by the FTI, the Thai Industries Sentiment Index dropped to 86.2 in April from 87.7 in March. April was the fourth straight month of declines, Dow Jones reported.

Based on a survey of 1,202 operators in 43 industrial groups, the reasons behind a further slide in sentiment were Thailand’s economic slowdown and its drought problem, which have particularly hit consumption and spending in the agricultural sector. Generally lower domestic sales also contributed to weaker confidence.

Respondents to the survey have urged the government to speedily solve the problem of weak agricultural prices and to lift local spending and consumption to help rectify the situation, the FTI said.

However, the survey’s three-month sentiment index rose for the second consecutive month to 102.1 in April from 100.4 in March.

The future sentiment index improved on expectations on further government-spending disbursements as the current fiscal year draws to a close while the baht’s recent weakening offers hope for higher exports, said chairman of the FTI, Supant Mongkolsuthree.

The baht depreciated more than 2% against the US dollar since the Bank of Thailand made another surprise 25 basis-point cut to its policy rate at the end of April in the hope of boosting exports.

Still, economists were skeptical about the business outlook in the country.

Bangkok-based TMB Analytics projected that the country’s manufacturing activities likely contracted 4.7% from a year earlier in April. “Going forward, [sentiment] is still weak on the back of weak export activity and a sluggish recovery of domestic demand,” said Thammarat Kittisiripat, senior specialist at TMB Analytics.