FTI/TISI

Editorial staff

Thailand Industry Sentiment Index (TISI) in July was first rise in four months while FTI warned the government to take urgent action on cheap-product dumping.

The Federation of Thai Industries (FTI) by the chairman Kriengkrai Thiennukul, and the vice chairman, ML Peekthong Thongyai reported that the Thailand Industry Sentiment Index (TISI) for July 2024 increased to 89.3 from 87.2 in June 2024.

Kriengkrai Thiennukul

The TISI experienced its first rise in four months, driven by several contributing factors. One key factor was the expansion of domestic demand for consumer goods, particularly in the food, pharmaceutical, and cosmetics sectors.

The expedited budget disbursement and government spending stimulated monetary circulation, benefiting industrial products, with a notable impact on construction materials. Concurrently, applications for investment promotion expanded during the first half of 2024 (January–June), with a total investment value of 458.36 billion baht, representing a 35 % year-on-year growth.

Furthermore, TISI was bolstered by growth in the tourism sector, attributed to the government's implementation of tourism promotion measures, including the visa exemption policy for foreign tourists and domestic tourism promotion initiatives during the low season.

Despite the rise in TISI, challenges persist due to high levels of household indebtedness and non-performing loans (NPLs). These financial constraints continue to exert considerable pressure on domestic consumption, as evidenced by the 24.16 % year-on-year decline in overall domestic automobile sales and the 1.85 % year-on-year contraction in exports during the first half of 2024 (January–June).

The real estate sector has also experienced a slowdown, primarily due to consistently weak domestic purchasing power. The same situation exists in the export sector, especially in air conditioning and refrigerating machines, gems and jewelry, and electronic appliances.

Moreover, escalating transportation costs, including freight and various associated surcharges, are exerting a negative impact on TISI.

According to the TISI survey conducted in July 2024, 1,323 entrepreneurs across 46 industry clubs of FTI expressed their concerns regarding various factors. The survey revealed that 66.8 % of the responses were worried about the global economy, followed by 58.7 % who were concerned about politics, and 37.9 % about the exchange rate of the Thai baht against the USD. Conversely, the domestic economy, fuel prices, and loan interest rates were less critical factors, with 61.2 %, 60.6 %, and 57.1 % of respondents expressing concerns, respectively.

The TISI forecast for the next three months is expected to rise to 95.2, a notable increase from 93.4 recorded in June 2024. This upturn is underpinned by government spending and investment, the expansion of the tourism sector facilitated by the visa exemption policy, and the implementation of the Digital Wallet economic stimulus initiative. However, entrepreneurs have expressed anxiety about global economic uncertainties, which pose a risk to the growth of the export sector.

Additionally, the escalating manufacturing costs, particularly the rise in the minimum wage to 400 baht per day, are seen as areas of apprehension.