FTI: Sentiment ready to bounce back in 2020 despite troubles

The Federation of Thai Industries (FTI) estimates overall industrial sentiment in 2020 will recover thanks to huge demand from neighbouring countries.

Many sectors such as automotive, petrochemical, jewellery, food, cosmetics, furniture and cement are expected to see positive sentiment next year, said FTI chairman Supant Mongkolsuthree.

He said the government’s megaprojects should also increase demand for industrial products.

“These sectors can contribute to GDP in 2020 amid the bearish global economy and the US-China trade war,” said Mr Supant.

“Many neighbouring countries are demanding Thai-made products because of their higher quality. Their purchasing orders are expected to increase in 2020.”

He cited a FTI survey that showed the majority of the 45 industrial sectors are optimistic about 2020 sentiment.

“The government’s stimulus packages can build up the confidence indices for consumption, business and investment for the country,” said Mr Supant.

Yesterday, the FTI reported the Thai Industries Sentiment Index (TISI) in November increased for the first time in six months to 92.3 points because many industrial operators accelerated production in response to higher demand for the New Year period.

Many companies were speeding up production last month to compensate for fewer working days in December. The October index stood at 91.2 points. The FTI forecasts the TISI will reach 101.3 over the next three months, down from 102.9 points before.

In November, the TISI surveyed 1,205 companies in 45 industrial sectors.

Mr Supant said most business operators are still concerned about the trade war, the uncertain global economy and the baht’s appreciation.

The FTI is calling for the government to speed up negotiations of the Thai-EU free trade agreement as well as the US suspension of the Generalized System of Preferences scheme for Thailand to reduce myriad global trade risks amid bearish Thai exports.

“Operators are worried about delays in the fiscal 2020 budget expenditure, which could postpone state budget disbursement as well,” he said.

“Thai companies estimate higher minimum daily wages, effective from early 2020, will impact their labour costs, so the FTI is calling for the government to launch support measures to offset the company’s operating costs, such as reducing water and power fees.”

Mr Supant said a drought is expected to affect the country’s agriculture sector, hurting crop output in 2020.