Sentiment dips again in May as layoffs unveiled
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Sentiment dips again in May as layoffs unveiled

The industrial sector remains lacklustre as the Thai Industries Sentiment Index (TISI) continued to fall in May to 88.5 from 90.3 points, with 15,000 workers losing their jobs since early this year, according the Federation of Thai Industries (FTI).

The report concerning layoffs in the first five months of 2024 emerged as the TISI, which gauges the health of the manufacturing sector, dropped for a second consecutive month.

In April, the TISI stood at 90.3 points, down from 92.4 points in March.

"The index decreased because of a raft of factors that resulted in lower purchase orders, production and sales," said Nava Chantanasurakon, vice-chaiman of the FTI.

The unpleasant situation for manufacturers was attributed to weak consumer spending amid a high level of household debt which also caused banks to tighten their lending criteria, affecting many businesses, particularly car manufacturing.

Entrepreneurs also faced challenges from higher energy costs and more expensive freight rates as the result of a shortage of freighters and shipping containers. The shipping of freight is now taking longer due to tensions in the Middle East, specifically attacks on shipping vessels carried out by Houthi rebels in the Red Sea.

The May TISI was based on a survey of 1,329 entrepreneurs across 46 industries under the FTI. Among an increasing number of concerns, higher oil prices was identified as the leading concern, highlighted by 61.3% of respondents, followed by Thailand's sluggish economy (59.9%), and domestic political uncertainties (43.1%).

It remains unclear whether Prime Minister Srettha Thavisin will be removed from his post as the Constitutional Court set July 10 as the date of the hearing for Mr Srettha's case. The case pertains to a cabinet appointment made by the premier who allegedly infringed the constitution, according to media reports.

Meanwhile, ML Peekthong Thongyai, vice-chairman of the FTI, called on the government to speed up efforts to better regulate oil and gas prices, solve the shipping issue and help small and medium-sized enterprises (SMEs) cope with their current liquidity problem.

SMEs are still struggling to gain access to sources of finance. Without some remedies, some may be forced to shut down.

The FTI earlier said it expects factory shutdowns to continue to increase after 1,600-1,700 had already gone out of business earlier this year due to the economic slowdown, merger plans or rising operating costs.

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