Manufacturers gloomy again on industrial outlook

Manufacturers gloomy again on industrial outlook

Industrial sentiment fell again in February as manufacturers remained concerned about soft global demand, escalating drought conditions and fragile world economic prospects.

The Thai industries sentiment index fell for a second straight month in February, down to 85.1 points from 86.3 in January, the Federation of Thai Industries (FTI) reported yesterday.

The index has stayed below 100 points for 44 months since June 2012. 

FTI chairman Supant Mongkolsuthree said the industrial sector still suffered from lower purchase orders as a result of the slower-than-expected global economic recovery.

That had led almost all manufacturers to manage their production and businesses very carefully, he said.

"The poor global economy has taken a heavy toll on Thai exports, as indicated by January shipments that plunged 8.91% year-on-year to a value of US$15.7 billion," said Mr Supant.

"The government should step up supporting the private sector to find more export destinations and create value-added products for more competitiveness."  

The Commerce Ministry reported in February that exports contracted more than expected in January, hitting their lowest level since November 2011, when severe flooding closed thousands of factories. It was the 13th straight month of decline.

Mr Supant, also chairman of the Joint Standing Committee on Commerce, Industry and Banking, urged the government to rev up improving water management infrastructure. The drought, which is expected to last until the middle of the year, will hit the economy hard, he said.

Mr Supant said the natural disaster was now not only affecting grassroots people but also the private sector, weakening overall purchasing power.

"Although the government has launched economic stimulus measures such as the Village Fund to boost purchasing power of low-income earners and local people, the measures are not sustainable enough," he said. "Infrastructure investment should be speeded up alongside the money injection."

Mr Supant urged the government to postpone the expensive high-speed and double-track railway projects so that it could allocate more budget to water management and tackling the drought.

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