The Thai Industries Sentiment Index (TISI) in September hit its lowest level in 12 months, dropping to 92.1, wilting under pressure from the continuing US-China trade war, which largely impacted the export sector, the Federation of Thai Industries (FTI) reported on Friday.
The index fell from 92.8 points in August.
Supant Mongkolsuthree, the FTI chairman, said trade tensions showed no sign of easing, which would have a positive affect for the global economy.
Local producers were worried about the baht's appreciation.
"In September, the baht gained 5%, to its strongest level of 30.76 baht versus the US dollar, and Thai exporters suffered from this currency appreciation," he said.
"Retail oil prices have increased gradually, putting pressure on the operating costs of businesses."
Mr Supant said although the government had many stimulus measures to beef up the country's GDP, overall business sentiment had yet to recover in the big picture. He cited the slowdown of new investment projects and new machinery imports.
"Domestic consumption is still shrinking from widespread floods in many provinces," he said.
The FTI forecast is for the TISI to reach 103.4 over the next three months, up from its previous forecast of 102.9, as business operators expect the government's 1,000-baht cash giveaway and 15% cash rebate scheme will stimulate the local economy in the fourth quarter of 2019. The median is 100; above that shows positive sentiment.
The TISI survey in September covered 1,103 companies in 45 industrial sectors.