The Thailand Industry Sentiment Index continued its decline to 88.4 points in October, the lowest level in 16 months, on the back of lower sales by manufacturers and unpleasant domestic circumstances, says the Federation of Thai Industries (FTI).
The indicator, which was based on a survey of 1,337 enterprises across 45 industries under the FTI, was at 90 points in September.
The decrease was attributed to lower sales and production, as well as unimpressive results of business operations, said Kriengkrai Thiennukul, chairman of the FTI.
The Thai economy has high levels of household debt, weak consumer purchasing power, low farming income and high interest rates, he said.
According to the FTI, manufacturers in the fashion, construction, electronics and machinery segments struggled to deal with high competition in the market. Their sales decreased, leading to lower goods production.
Baht depreciation also caused imported raw materials to become expensive, affecting their operating costs.
Mr Kriengkrai said the manufacturing sector expects to receive more purchase orders from Europe, Japan and the Middle East, as well as benefit from the new visa-free policy.
The federation remains concerned about high household debt, which stands at 90.6% of GDP, and high levels of loan sharking, which represents 19.6% of household debt.
"Many businesses, including small and medium-sized enterprises [SMEs], told the FTI they need help and support from the government to help them deal with debt collectors they describe as 'gangsters' who come to their workplaces everyday," said Mr Kriengkrai.
The FTI urged the government to speed up the implementation of economic stimulus measures, notably the e-refund scheme, in December 2023 and January 2024.
The e-refund scheme, which is similar to the Shop Dee Mee Khuen scheme, is a shopping tax incentive where individuals can request a tax refund after spending a certain amount of money.
The FTI also wants the government to carry out a debt suspension programme to help reeling SMEs, and carefully consider a daily minimum wage increase proposal, which should be based on inflation and the country's GDP.