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.
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 458,359 million baht, representing a 35 percent year-on-year growth.
Furthermore, TISI was bolster 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.
Concerned over high levels of household indebtedness and NPLs
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 percent year-on-year decline in overall domestic automobile sales and the 1.85 percent 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.
The survey showed 66.8 % of the responses were worried about the global economy
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 reveal that 66.8 percent of the responses were worried about the global economy, follow by 58.7 percent who were concern about politics, and 37.9 percent 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 percent, 60.6 percent, and 57.1 percent of respondents expressing concerns, respectively.
TISI for the next three months is expect to rise to 95.2
The TISI forecast for the next three months is expect to rise to 95.2, a notable increase from 93.4 recorded in June 2024. This upturn is underpin 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 see as areas of apprehension.
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