A monthly FTI survey shows industry confidence has been in negative territory since April last year - a result of political instability and an appreciating baht.

FTI vice chairman Adisak Rohitasune said the Thai Industries Sentiment Index dropped to 82.7 last month from 83.6 in January, owing to an unstable national political environment and a world economic downturn. A factor below 100 indicates negative confidence. Confidence is positive above 100.

At the start of the year, Industry Minister Kosit Panpiemras said economic recovery would come in the third quarter.

However, the private sector - particularly exporters - said recently it would suffer in the coming quarter due to the strength of the baht and the global economic slowdown.

Adisak said it was hard to forecast an improvement or worsening in the second half of the year owing to unpredictable world oil prices and domestic politics and economic direction.

Nevertheless, he called on the government to speed up the completion of a constitution and schedule an election. This will boost both local and overseas investor confidence.

He added the public expected the interim government to honour a promise made last weekend to spend Bt200 billion encouraging domestic consumption and investment.

An appreciating baht has harmed export competitiveness, but the FTI index noted an increase in confidence among those generating less than 30 per cent of revenues from overseas sales. It rose to 83.1 last month from 81.2 in January.

Small-company confidence climbed to 76.1 in February from 74.4 the previous month. Adisak said smaller companies had adapted more easily than medium and large entities.

Chalida Ekvitthayavechnukul

The Nation