Industrial Confidence Falls to 89.9 Amid October Floods, Energy Costs
Thailand's industrial confidence index fell to 89.9 in October due to flood damage, higher energy and transport costs, and tighter SME lending. However, the three-month outlook rose to 98.5, buoyed by rising investment applications, export growth, and government tax relief measures.
The FTI reported that the industrial confidence index for October fell to 89.90 from 90.70 in the previous month, driven by flood damage that disrupted production and raised repair costs, as well as impacts on agricultural raw materials, particularly food processing. Entrepreneurs also face higher energy costs, with diesel up 6.6% and liquefied natural gas (LNG) up 9.3% month-on-month, increasing production and transport expenses. Advance ordering and flood-related delays at Laem Chabang port added to logistics pressures, while SME credit continued to contract, limiting access to working capital and recovery investment. On the positive side, investment promotion applications in the first nine months rose 28% year-on-year, industrial exports kept growing, and demand for construction materials and electrical appliances surged from post-flood home repairs, alongside economic activity from the IMF and World Bank meetings in Thailand. The three-month forward confidence index climbed to 98.50 from 97.70, supported by excise tax cuts on diesel and gasohol E20, subsidies for residential solar cells, and tax restructuring to boost domestic vehicle production. Risks remain from overseas protests, southern floods, and widening trade imbalances. FTI Vice Chairman Montri Mahaprukpong proposed government relief including double tax deductions for repair and recovery costs, land and building tax reductions or exemptions, flood prevention support, promotion of E20 and B10 as base fuels, and assistance for SMEs to adopt Small AI or on-device AI to improve efficiency.
