Mr. Supant Mongkolsuthree, FTI Chairman, revealed Thailand Industry Sentiment Index (TISI) for August at 76.8, which decreased from 78.9. in July 2021. The index has dropped to its lowest in 16 months since May 2020 and declined in all regions and all industrial sizes. The factors affecting the confidence of are the government's COVID-19 control measures on the easing of COVID-19 restrictions at maximum in the 29 provinces and extending lockdown policy throughout August. This led to the reduction of economic activities while industrial sectors are still not recovered, affecting productivity and delays delivery, especially in export-oriented industries.
Moreover, industrial entrepreneurs are also concerned over the vaccination of factory workers has not met the target operators. Further, the economic conditions in the country are highly uncertain as purchasing power remains weak and the lack of liquidity for SMEs. Export demand in the international market has slowed down due to the pandemic in many countries, especially in Asia. Meanwhile, the problem of high freight rates has resulted in higher shipping costs for exporters. Also, the shortage of semiconductors or chips has hassled the automotive industry and electronics industry.
The survey, which was conducted in August 2021 from 1,395 enterprises, covering 45 industry clubs nationwide, unveiled factors of concern which are COVID-19 situation (75.8%), national economy (74%), domestic politics (54%), and interest rates and loans (42.2%). On the other hand, the survey also unveiled that oil process (58.8%), world economy (51.3%), and THB/USD exchange rates in exporters' view (38.6%) assisted in relaxing entrepreneurs' concerns respectively.
TISI is forecasted to increase in the next 3 months to 90.9 (from 89.3 in July 2021) due to the forecast that the government will reduce the COVID-19 control measures along with speeding up vaccination which will help reduce the infection rate and raise economic activities. In this connection, the government should speed up the economic recovery through various economic stimulus measures including accelerating the expansion of exports continuously.
Recommendation to the Government:
- To provide support fund for establishing Factory Quarantine and Factory Accommodation Isolation including support the cost of purchasing ATK test kits to randomly detect infected people in the workplace every 14 days according to Bubble and Seal measures.
- To accelerate the vaccination as well as arrange mobile vaccination units for workers to maintain the potentiality of the country's production and export sector.
- To extend the debt moratorium on both principal and interest payments for at least 6 months to 1 year to help those businesses who affected by COVID-19 control measures including support low-interest loans to enhance liquidity for SMEs.
- To negotiate with trading partners and build confidence in the safety of Thai exports.
The Federation of Thai Industries (FTI) complied the survey results of TISI as well as data on economic and industry indicators from various agencies for the past 3 years. It is prepared as a dashboard published on Data Space (iDS) website of FTI to facilitate entrepreneurs and the general public to access useful information in their business operations. You may access the said information service at www.fti.or.th/ids
Source: Federation of Thai Industries