อุทกภัยดึงดัชนีเชื่อมั่นอุตฯ ลดลงต่อเนื่อง เสนอรัฐพัฒนาระบบแจ้งเตือนภัยพิบัติแบบเรียลไทม์Flooding Continues to Pull Down Industrial Confidence Index, Urges Government to Develop Real-Time Disaster Alert System

Mr. Nava Chanthanasurakorn, Vice Chairman of the Federation of Thai Industries (FTI), and M.L. Pikthong Thongyai, Vice Chairman of the Federation of Thai Industries (FTI) and Chairman of the Economic and Academic Division, jointly disclosed the results of the industrial confidence index survey for September 2024, which stood at 87.1, a decrease from 87.7 in August 2024. This decline was influenced by negative factors arising from flooding in the northern, northeastern, and central regions, causing damage to residential buildings, agricultural areas, and industries, as well as tourism zones, impacting the overall economy with estimated losses ranging from 30 to 50 billion baht. Meanwhile, domestic purchasing power remains weak due to pressures from household debt, leading consumers to be cautious about spending, reflected in the sales of cars and motorcycles in the country decreasing by 24% and 11% YoY, respectively, during the first eight months (January - August 2024).
Additionally, the issue of household debt and the stringent lending policies of financial institutions have resulted in delays in the disbursement of public investment budgets. As of September 27, 2024, only 63.31% of the investment budget had been disbursed, leading to a slowdown in sales of construction materials. The issue of dumping of Chinese goods has also negatively impacted Thai production, as producers face high competition. The rapid appreciation of the baht has pressured the export sector, particularly for agricultural and food products that predominantly use domestic raw materials, affecting the competitiveness of Thai products. The baht strengthened from 34.92 baht per US dollar in August 2024 to 33.52 baht per US dollar in September 2024, following the depreciation of the US dollar and the US Federal Reserve's decision to lower the policy interest rate by 0.50% to a range of 4.75-5.00%, leading to an increase in capital inflow into Thailand.

However, in September, there were positive factors from the economic stimulus project for 2024, which included the distribution of cash amounting to 10,000 baht to 14.5 million recipients holding state welfare cards and individuals with disabilities from September 25-30, 2024, which helped stimulate domestic spending and consumption, particularly in consumer goods. Meanwhile, the tourism sector continues to be a key engine driving Thailand's economy, with the accumulated number of international tourists from January 1 to September 29, 2024, totaling 26,005,295 people, reflecting a year-on-year growth of 30%, generating revenue from foreign tourist spending amounting to 1,214,681 million baht. The export sector has shown continuous improvement in line with increasing global demand in markets such as the United States, China, ASEAN, Europe, India, Africa, and the Middle East, with shipping freight rates decreasing from the previous month, especially on routes to the United States and Europe, leading to reduced shipping costs.
A survey of 1,353 operators covering 46 industry groups conducted by the Federation of Thai Industries (FTI) in September 2024 revealed that the factors causing increased concern among operators include the domestic economy at 67.3%, and exchange rates (from the exporters' perspective) with reference to the baht against the US dollar at 48.1%. Meanwhile, concerns regarding the global economy declined to 58.6%, oil prices to 49.8%, domestic political situations to 36.3%, and loan interest rates to 36.0%, respectively.
Meanwhile, the index forecasting the next three months stands at 96.7, an increase from 95.2 in August 2024, buoyed by government economic stimulus measures, such as economic recovery projects, liquidity support measures for flood victims, and the 10,000 baht Phase 2 initiative, which are expected to support economic growth for the remainder of 2024. The tourism sector is anticipated to expand during the High Season, and will benefit from government tourism promotion measures. Additionally, the positive spillover from China's economic stimulus measures will benefit Thai exports of petrochemical products, rubber, electronics, as well as the tourism sector. Exports are also expected to perform well due to demand for goods during the Christmas and New Year holidays. However, concerns persist among operators.

These include the unpredictable weather caused by the La Niña phenomenon, resulting in heavy rainfall and worsening flooding situations affecting agricultural raw materials, geopolitical conflicts, particularly in the Middle East, which pose risks to the export sector, and the upcoming US presidential election, which may impact international trade policies and the global economy. Nonetheless, the confidence index remains below 100, indicating that operators' confidence is at a poor level. 
Recommendations to the government 
1. It is requested that the Bank of Thailand maintain the exchange rate at an appropriate level and reduce volatility, while also considering the policy interest rate in line with the current economic situation.
2. The government is urged to develop an accurate and reliable disaster alert system capable of real-time alerts via mobile phones, as well as coordinate with neighboring countries to expedite the resolution of agricultural issues in forest areas to maintain upstream forest areas to prevent flooding and landslides.
3. It is suggested that the government consider implementing continuous economic stimulus measures for the remainder of 2024, such as tax measures to stimulate spending and measures to promote domestic tourism.

Furthermore, the FTI has compiled data from the industrial confidence index survey and various economic and industrial indicators from different agencies over the past three years into a dashboard, published on the Industry Data Space (iDS) website of the FTI, to facilitate access for operators and the general public to valuable information for business operations. This data can be accessed at https://fti.or.th/ids 

The FTI aims to "Strengthen Thai Industries for a Stronger Thailand."

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Published by the Corporate Communications Department, Federation of Thai Industries (Tel: 0-2345-1051)
Data compiled by the Economic and Academic Division, Federation of Thai Industries (Tel: 0-2345-1111)