FTI index takes hit for 2nd month

The Federation of Thai Industries (FTI) index fell for a second straight month in February on slowing purchase orders and falling demand after the government’s stimulus package lapsed.

FTI chairman Chen Namchaisiri said the FTI index was 86.2 in February, down from 87.2 in January, raising concerns that fewer orders could lead to a liquidity crunch that would affect operations at a time of intensifying competition.

“The index continued to fall for a second consecutive month in February, due to falling demand and weak purchasing power,” Mr Chen said. “Moreover, government measures to help stimulate spending at the end of last year have ended. So there is no stimulus package to help spur spending further.”

He said falling demand would mean falling revenue that would make producers in several industries start to feel the liquidity crunch, eventually leading to a loss in competitive advantage.

“This falling demand will immediately affect small and medium-sized enterprises (SMEs), particularly in terms of their liquidity and cash flow,” he said.

Major negative, internal factors that further pushed the index down in February were the volatile exchange rate and internal political uncertainty, making people reluctant to consume.

Other external negative factors were rising oil prices and the global economy, which may have yet to fully recover, Mr Chen said.

The FTI conducts its industry sentiment index every month by sending questionnaires to 1,137 member companies in 45 sectors.

On a positive note, most respondents were optimistic about Thai exports, which are expected to rebound this year on recovering demand in the global market.

Mr Chen said there were order increases in certain major industries, including food, electronics, air conditioners/coolers, auto parts, rubber products and petrochemical items.

Meanwhile, the index measuring confidence for the economy over the next three months rose slightly to 100.9 in February, up from 100.4 in January, signalling that people still believe the economic situation will be better in the near future, he said.