Business sentiment among Japanese companies operating in Thailand has been dampened by the ongoing US-China trade row and the baht's appreciation, sending a benchmark of their confidence for the second half of 2019 to an eight-year low.
The diffusion index for the July-December period marked minus 38, down 19 points from the previous half-year period and logging the worst figure since the latter half of 2011, when the index stood at minus 41 after heavy flooding, according to a survey released on Tuesday by the Japanese Chamber of Commerce, Bangkok.
The index shows business forecasts in a six-month period in comparison to the previous period by subtracting the percentage of companies answering "deteriorating" from that answering "improving."
"We think domestic economic activity in the latter half of 2019 was slowed down by the US-China trade wrangling and baht appreciation," Atsushi Taketani, director of the chamber's economic research group and head of the Japan External Trade Organization's Bangkok Office, said on Tuesday.
He said the automobile-related industry was deeply affected, especially the transportation machinery sector suffering minus 78, along with the steel and nonferrous metal sector marking minus 63 and the chemical sector minus 46.
Although the figure of an estimate for the January-June period of 2020 improved to minus 18, Taketani said "deterioration of the global economy is expected if the new coronavirus issue prolongs" as the survey, conducted from Nov 1 to Dec 3, 2019, did not take the outbreak into account.
Asked about the impact of the US-China trade friction, 56% responded they expect "negative effects," followed by 21% who saw "no impact," while 11% answered they expect "positive effects."
The chamber polled 1,750 members, of whom 595 or 34% responded.