THE THAI Industrial Sentiment Index (TISI) improved to the highest level in seven months in October, while industries also foresaw better sentiment for the following three months, with more orders from overseas promoting overall manufacturing growth, the Federation of Thai Industries (FTI) said yesterday.
The index increased from 84.8 points in September to 86.5 last month, largely due to higher orders to serve festive-season demand in both the overseas and domestic markets during the year-end period.
The future index for the next three months also improved, from 102.4 points in September to 102.9 last month – its highest level in 11 months.
FTI chairman Chen Namchaisiri attributed the TISI’s rise to higher demand for products for the upcoming festive season, especially from trading partners in China, Japan, Europe and the United States, which he said was driving growth of the manufacturing sector.
However, manufacturers were still concerned about the cost of production, price competitiveness, financial liquidity among SMEs, fluctuating exchange rates, and uncertainty over global economic growth.
Chen said industrial businesses were quite positive about domestic economic expansion, and saw better prospects for export growth after Thai shipments had returned to positive growth territory for two consecutive months.
“The industrial sector is expected to grow continuously late this year and throughout next year, due to expected stronger global and domestic economic expansion,” he added.
The FTI chief also said the government’s measure to provide a welfare subsidy to about 8 million low-income Thais later this year would help stimulate spending and create better sentiment toward domestic economic growth in the current quarter.
Moreover, president-elect Donald Trump’s declared intention to withdraw the US from the Trans-Pacific Partnership, thus effectively scuppering the pact, should create a positive outcome for Thailand as some foreign investors may as a result reconsider their plans to invest in TPP member countries and opt for the Kingdom instead, he said.
However, in his view, Thailand still needs to develop its competitiveness and standards to meet the new era of global trading.
Meanwhile, the FTI also reported yesterday that demand for cement in Thailand would grow in the current quarter, after contracting 3.3 per cent year on year in September due to the particularly heavy seasonal rains this year.
As the country is now entering the dry season and the government has commenced work on a number of mega-investment projects, demand for cement and other construction materials should increase significantly during the final quarter, the federation predicted.
In addition, the FTI’s Automotive Industry Club reported that Thai vehicle production in the first 10 months was 2.55 per cent higher than in the same period last year, at 1.63 million units.
Surapong Paisitpattanapong, spokesman of the club, said rising production was due to increased output of new pickup models and passenger cars, especially eco-cars for export.
Last month, however, overall auto production decreased 2.59 per cent year on year to 161,105 units, due to lower production of pickups for export.
October production for exports decreased 7.23 per cent year on year to 103,192 units, mainly due to lower shipments to the Middle East, Africa, Central America and Latin America, as some auto-makers have now established a manufacturing presence in those markets, he explained.
Exports in the first 10 months of the year rose 7.37 per cent in value terms to Bt751.52 billion, but fell 1.25 per cent in volume to 1 million units.
SURAPONG ADDED THAT THE UPCOMING “MOTOR EXPO” SHOULD STIMULATE PRODUCTION BY ANOTHER 20,000 UNITS BY THE YEAR’S END.