Thailand's industrial sentiment index slipped to 89.7 in August, from 90.0 in July, weighed down by heavy rainfall that disrupted economic hubs, high energy costs and weak domestic purchasing power, according to the Federation of Thai Industries (FTI).
FTI Chairwoman Pimjai Leeissaranukul stated today that the decline was further exacerbated by a prolonged contraction in the automotive sector, due to sluggish sales and tighter credit access.
Vehicle sales fell 17.38% year-on-year over the first seven months of this year, while small and medium-sized enterprises (SMEs) continue to struggle with high production costs, limited access to capital and stiff competition from imported goods.
Meanwhile, investment remains concentrated in targeted industries, limiting investment opportunities for traditional sectors and SMEs.
Despite domestic headwinds, exports remained a key growth driver, rising 18.2% on strong global demand for electronics and AI-related technology.
This boosted domestic production of computers by 50.2%, printed circuit boards (PCBs) by 15.2%, and hard disk drives (HDDs) by 19.63%, while the food processing and pet food sectors also posted steady expansion in line with the global market.
Looking forward, the FTI’s three-month expectation index improved to 97.0 from 96.1, reflecting manufacturer confidence in upcoming Q4 stimulus measures, year-end festive spending and the government's ‘Thailand Fast Pass’ initiative, aimed at accelerating private investment.
Operators remain cautious though regarding potential US tariff changes, Middle East geopolitical tensions and Super El Niño weather volatility affecting agricultural raw materials.
The FTI also proposed that the government accelerate the push to make E20 the country’s primary gasoline standard, to lower costs and reduce fuel imports, while adding value to agricultural produce through the ethanol industry.
The federation also urged stronger local content requirements for foreign direct investment (FDI) and called for public and private campaigns to purchase Thai-made goods to boost capacity utilisation for local SMEs.
