TISI drops to lowest level in 21 months

TISI drops to lowest level in 21 months

Engineers assemble vehicle parts at a production facility. Automobile exports and domestic car sales have been downgraded. (Photo by Pattanapong Hirunard)
Engineers assemble vehicle parts at a production facility. Automobile exports and domestic car sales have been downgraded. (Photo by Pattanapong Hirunard)

The Thai Industries Sentiment Index (TISI) in February hit its lowest level in 21 months, dropping to 90.2 because of weak purchasing power and the effects of the coronavirus outbreak, according to a report of the Federation of Thai Industries (FTI).

Delays in this year's fiscal budget and Eastern Economic Corridor (EEC) scheme as well as the drought also contributed to the weak score.

FTI chairman Supant Mongkolsuthree said Thailand's economy and businesses have been affected by many pressures, primarily the Covid-19 outbreak.

"If the coronavirus outbreak does not end soon, there will be no economic growth in Thailand and around the world," he said.

The TISI in February was compiled from a survey of 1,209 companies in 45 sectors and measures their confidence in the economic outlook of the respondents' respective industries.

The FTI said businesses are also worried about the effects of the trade war between China and US and the strong baht.

"The TISI will likely hit its lowest level in 45 months in three months time," said Mr Supant.

FTI has called on the government to set up capital funds worth 100 billion baht to support small and medium-sized enterprises (SMEs), especially in the tourism, service and retail sectors.

"In the worst case, the FTI expects the coronavirus outbreak will mean many businesses will not be able to pay their employees, and the workforce will lose 1 million jobs," he said.

The FTI also cut its car production estimates for 2020 to 1.9 million units from 2 million, a 5% decrease based on a host of economic difficulties.

Surapong Paisitpatanapong, spokesperson for the FTI's automotive industry club, said the outbreak hit the domestic and overseas markets, meaning the industry should see lower demand.

Car exports were revised down 5% to 950,000 units from an earlier target of 1 million, while domestic car sales were cut by 5% to 950,000.

In February, Thailand's automotive industry produced 150,640 units, a 17.7% year-on-year decrease. Production for the export market dipped 15.6% to 83,385 units.

Domestic production dropped to 67,219 units or down 20.3% as the sales volume in the domestic market fell 17.1% to 68,271 units attributed to financial institutions tightening loan offerings.

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