The Thailand Industries Sentiment Index (TISI) dropped in August because of heavy rains and flooding, says the Federation of Thai Industries (FTI).
Supant: Trade war remains a concern
Supant Mongkolsuthree, the FTI chairman, said the TISI survey had 1,127 industrial operator respondents in August and the index stood at 92.5 points, down from 93.2 in July.
"The rainy season last month was the main factor pressuring purchasing power in provincial areas because of floods in the North and Northeast," he said.
"As a result, many business operators reported declining sales orders, in particular for sentitive products and construction materials."
Mr Supant said operating and production costs remain higher as prices of oil and raw materials climbed.
Shippers are also concerned about the many tariff measures on Chinese products from the US government that have created a widespread trade war, he said.
"From exporters' point of view, they are also worried about currency exchange trends, which are gathering momentum from global trade patterns," said Mr Supant.
Montri Mahapreukpong, an FTI vice-chairman, said although overall exports have grown by 9-10%, exporters are still monitoring the baht strength closely.
"The current baht rate versus the dollar is manageable, but we have to follow up the US Federal Reserve's decision on Sept 25-26 on its interest rate, which should affect future Bank of Thailand movements," said Mr Montri.
The FTI kept its optimistic outlook on the TISI, standing at 105.6 points over the next three months. That figure is higher than the projection last month -- 104.5 points.