Business sentiment takes tumble

Business confidence fell in October as executives and owners fretted about the impact of a trade war on the Thai economy, a drop in Chinese tourist arrivals and low oil palm and rubber prices.

The Thai Chamber of Commerce (TCC) confidence index, which gauges nationwide business sentiment, edged down to 48 points in October from 48.4 in September and 49.8 in August. August was a four-month high after 48.6 in July, 48.4 in June and 47.7 in May — the month the survey debuted.

The TCC index sampled 363 TCC members nationwide in every region covering the agriculture, industrial, trade and service sectors.

“Thailand’s overall business sentiment slowed from negative effects, including the deepening trade row that altered export and border trade, a lower number of Chinese tourists, and poor rubber and oil palm prices,” said Sauwanee Thairungroj, president of the University of the Thai Chamber of Commerce (UTCC).

Ms Sauwanee said sentiment in the southern region, in particular, plunged after the sharp drop in Chinese arrivals following the boat tragedy in Phuket in July, as well as poor rubber and oil palm prices.

The proliferation of the online platform also affected small and medium-sized enterprises (SMEs), she said.

Ms Sauwanee proposed the government provide clinical services to SMEs in provincial areas and training courses about online trade to upgrade their knowledge.

The government should set up regulations to govern online trading to build competition in fair trade and increase efficiency in tax collection systems, she said.

Thanavath Phonvichai, vice-president for research of the UTCC, said overall poor consumption also affected business sentiment.

Mr Thanavath is hopeful that the TCC index in November and December will improve with the government’s year-end stimulus packages, including the shopping tax break scheme, the promotion of secondary tourism provinces, the state aid measures to raise rubber and oil palm prices, and visa-on-arrival fee waivers for foreign tourists.

The university is maintaining its GDP growth forecast at 4.1-4.2% this year.

Mr Thanavath said the upcoming election should help boost economic growth prospects next year, with spending projected to total 80 billion baht.