The Thailand Industry Sentiment Index (TISI) fell in December 2023 to 88.8 points, attributed to a range of factors from a decrease in sales to lower production, says the Federation of Thai Industries (FTI).
The indicator was 90.9 in November, the highest level in five months, as tourism recovery and state measures to ease the financial burden of businesses and households improved sentiment.
However, consumer purchasing power remained weak while manufacturers reduced their production in December, following an increase in production in previous months to support sales during Christmas and New Year celebrations.
"The TISI also decreased due to high competition in the market and a slowdown in the construction sector, especially constructors who work for government projects," said Kriengkrai Thiennukul, chairman of the FTI.
The December TISI was based on a survey of 1,309 entrepreneurs in 46 industry clubs under the FTI.
Most respondents were concerned about global economic uncertainties, which gained the votes of 81.1%, followed by high loan interest rates (72.2%) and foreign exchange rate fluctuations (45.2%).
On a list of issues with decreasing worries, oil prices came first (48.5%), followed by the domestic economy (43%) and the political situation in Thailand (38.5%).
The FTI is closely monitoring how tensions in the Red Sea will affect the export and manufacturing sectors.
Mr Kriengkrai believes Thailand will see the impact by the second quarter.
Manufacturers are considering adjusting production and operations to suit changes in global logistics, including higher shipping costs and a container shortage.
The FTI suggested the government implement measures to alleviate the impact of rising freight costs, caused by the unrest in the Red Sea.