August’s economic outlook index falls to -2, a 4-point fall from July’s; the index is expected to remain negative in September, with the value being -1. The fall of this index has been driven by the slowdown of Thai economy in the second quarter. It should also be noted that, since April, there has not been any sign of improvement in economic outlook.
Four business performance sentiment indices- revenue, cost, liquidity and employment- remained pessimistic. August’s revenue index is -4; a slight improvement of the index to -2 is expected in September. Cost index falls from 57 in July to 52 in August and expected to fall further to 50 in September. While the fall represents an improvement, the fact that the cost index remained positive implies that the cost would continue to rise, albeit at a slower rate than July. Pessimistic outlooks for revenue and cost indices have caused the liquidity index to fall to -1 in September; the index is expected to fall further to -4 in September. August’s employment index remains at 1 and is expected to fall to -1 in September.
The five most important factors affecting business performances in August-July are as follows: overall condition of the Thai economy (4.5 points on a scale of 5); reduced demand (4.5 points); energy and transportation costs (4.3 points); global economy (4.1 points); and lack of access to funding (3.9 points).
It is clear from the results of this survey that economic slowdown and cost of living have caused a decline in the nation’s purchasing power. The prospect of higher energy and transportation costs in September negatively influenced the CEOs’ expectation on their liquidity situation. Ability to deal with short-run liquidity problem, therefore, has become an important issue for business. If the Thai economy in the third and fourth quarters do not improve, there is a good prospect that CEOs’ confidence will fall even further.