Thai Business Confidence Drops to 45.2 on Floods, Middle East Conflict
Thailand's Business Confidence Index plunged to 45.2 in October, its lowest level in months, as severe flooding and the Middle East conflict battered manufacturing, trade, and transport. The Bank of Thailand expects sentiment to recover to 51.3 over the next three months, driven by tourism spending, seasonal demand, and post-flood reconstruction, though uncertainty over the conflict and high costs continue to weigh on investment outlook.
On November 3, 2026, the Bank of Thailand (BOT) announced that the Business Confidence Index for October 2026 stood at 45.2, down from 48.1 the previous month and marking the lowest level in months. All components declined, led by costs, production, and operating results, reflecting the prolonged Middle East conflict and temporary flood impacts. Manufacturing confidence fell across nearly all categories for a second straight month below the 50 threshold, led by food and beverages where agricultural raw materials were damaged by flooding — such as canned fruit and animal feed — renewing concerns over declining yields from El Niño. Electronics and electrical appliance confidence also dropped after warehouses and electrical systems suffered water damage and transport disruptions hindered goods shipments and worker commutes.
Non-manufacturing confidence likewise declined as most businesses faced high costs, dragging down transport, trade, and warehousing. Wholesale trade weakened across chemicals, furniture, and construction materials, while hotel confidence fell due to flood repairs and some tourist cancellations.
Looking ahead three months, the index edges up slightly to 51.3 from nearly all components except costs and investment, reflecting persistent uncertainty around the Middle East conflict. Non-manufacturing confidence improves modestly, led by retail — including automotive sales ahead of an expected excise tax hike and post-Motor Show deliveries — and consumer goods boosted by seasonal tourism demand. Construction in utilities and housing also anticipates post-flood repair work. Manufacturing confidence stabilizes, with food and beverages rising on seasonal harvests of sugar and canned fruit and festival-driven beverage demand, pushing the sector above 50 for the first time in six months. Automotive production also expects year-end Motor Show orders. However, confidence slips in some electronics segments — such as printer parts and eyeglass lenses — and electrical appliances facing oversupply and intense price competition.
