The Thai Industries Sentiment Index (TISI) dropped in December to 93.2 points on interest rate rise concerns and China's economic sentiment, the Federation of Thai Industries (FTI) reported on Wednesday.
The index fell from 93.9 points in November.
FTI chairman Supant Mongkolsuthree said business operators were concerned a rise in the policy interest rate would increase their financial costs, particularly SMEs.
They were also concerned about exports suffering from a downturn in the Chinese economy.
Although December was the high season for local consumption, there were also long holidays so many businesses had to increase manufacturing rates in November to offset the fewer working days in December.
"Many factors caused the December index to decline," he said.
"But we are seeing many promotions intended to stimulate sales of cars, fashion clothes and food."
The FTI forecasts the TISI will hit 105.9 over the next three months, down from 107.4 points projected the previous month, due to instabilitiy in the world economy resulting from the US-China trade war putting pressure on Thai exports.
There were also worries over the upward trend of oil prices.
The TISI in October was compiled from a survey of 1,206 companies in 45 industrial sectors.