The industrial confidence index declined due to risk factors in the production sector, experiencing a slowdown. This drop is attributed to shorter working days and an extended holiday period during the New Year Festival. Manufacturers had previously accelerated production. Concurrently, consumers' purchasing power has not fully rebounded, constrained by high household debt levels, which have remained stable. The persistent issue of severe price competition exacerbates the situation. The construction sector has also witnessed a slowdown, particularly in government construction projects, leading to reduced demand for construction materials. On the export front, freight rates increased due to the Houthi group in Yemen affecting commercial shipping vessels passing through the Red Sea. This impact is especially noticeable in transportation between Asia and Europe. Despite these challenges, positive factors during the New Year festival and the expansion of the tourism sector contribute to a more optimistic outlook. Simultaneously, the export sector is displaying improvement as demand from trading partners gradually recovers. Additionally, government energy price subsidies, achieved by lowering the price of fuel and electricity, have played a role in reducing costs for operators.
According to a survey conducted by the Federation of Thai Industries (F.T.I.) in December 2023 which covered 46 industry groups conducted and involved 1,309 entrepreneurs, the findings reveal that entrepreneurs are growing increasingly concerned about specific factors. Top concerns include the global economy (81.1%), loan interest rates (72.2%), and exchange rates (from the exporter's perspective, specifically the baht against the US dollar) at 45.2%. Meanwhile, factors of lesser concern include oil prices at 48.5%, the domestic economy at 43%, and the political situation in the country at 38.5%.
The index forecast for the next three months stands at 96.2, down from 97.3 in November. Concerns about the minimum wage hike affecting operating costs, coupled with uncertainty regarding geopolitical conflicts, have led to higher commodity prices, including energy and raw material prices. However, there are still positive factors supported by the Easy E-Receipt measure. This tax deduction initiative for 2024 aims to encourage domestic consumption during the period from 1 January to 15 February 2024.
Recommendation to the Government sector.
- To support the Ministry of Energy in implementing all types of energy restructuring to ensure fairness to users and should be open to relevant sectors, allowing them to participate in providing opinions through the Joint Committee on the public and private sectors on Energy.
- To propose that the government takes measures to alleviate the impact of rising freight costs caused by unrest in the Red Sea, especially for container shipping lines operating on routes between Asia and Europe.
- To request the Revenue Department to expedite public relations and facilitate small and medium-sized stores in applying for the electronic tax invoice (E-Tax) insurance. This will enable their participation in Easy E-Receipt, ultimately expanding opportunities for selling products and services.
In addition, the Federation of Thai Industries (FTI) has assembled the results of the TISI survey and data on economic and industry indicators from various agencies for the past three years. It is prepared as a dashboard published on the Industry Data Space (iDS) website of FTI to facilitate entrepreneurs and the public to access helpful information in their business operations. You may access the mentioned information service at www.fti.or.th/ids
The Federation of Thai Industries (FTI) aims to "Strengthen Thai Industries for Stronger Thailand."
Source: The Federation of Thai Industries
