Thailand’s business confidence index plummets

[snoop1130]

Thailand’s business confidence index plummets

By The Nation

 

 

In April, the Business Sentiment Index (BSI) in Thailand plunged to 32.6, the lowest ever in history.

 

Signs showed that confidence had deteriorated in both manufacturing and non-manufacturing sectors from all aspects, as indicated by the below-50 threshold, the Bank of Thailand (BOT) report released on Tuesday (May 5) showed. 

 

Meanwhile, the expected BSI for the first quarter of the year dropped to 37.8 due to concerns over a severe and prolonged Covid-19 crisis. In April, the BSI sharply fell from 42.6 in March to 32.6, the lowest level ever recorded since 1999, when the index was born. 

 

All components came in below the 50-threshold, showing that sentiment has declined in all sectors due to the pandemic. 

 

In the manufacturing sector, confidence in production, orders and performance was considerably low, especially in machinery, equipment and automotive sectors. Declining confidence in the non-manufacturing sector was caused by the vulnerability of retail businesses, the hospitality and restaurant industry, and the logistics sector due to economic activities coming to a halt in order to curb the contagion. 

 

The expected BSI over three months plummeted to 37.8, close to the 37.1 recorded during the 2008 global financial crisis, owing to concerns over a protracted and serious Covid-19 situation. 

 

With a massive drop in confidence in the manufacturing industry, investment and employment sub-indices also plunged, which may imply future job losses. 

 

In the non-manufacturing sector, the sub-indices of retail and logistics sectors considerably dropped due to expected economic slowdown, as well as panic buying and hoarding before the lockdown. Also, respondents in the construction sector reported a pessimistic outlook in investment and construction volume, thereby weakening their confidence in employment. 

 

Source: https://www.nationthailand.com/business/30387339

 

-- © Copyright The Nation Thailand 2020-05-05

 

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[ukrules]

An image of the rarely seen 'final nail' formation

 

[sammieuk1]

A two Satang crash could be coming on the other hand a rise more likely ???? 

[wordchild]

Yes, much like in 1998,  Thailand looks like it will be the shoe that finally dropped.

for a number of reasons Thailand looks to be the most vulnerable economy in SE Asia (again) in this crisis.

As i work and do some business here i hope i am wrong but ,somehow, sadly, i dont think i will be.

I think reality is beginning to dawn on on local business, so hence, the confidence figures quoted above. 

[OnTheGround]

Will we see any movement in the baht? Still 32,40 to the dollar, and some said last week that the baht will remain around 32 this year.

[soalbundy]

11 hours ago, wordchild said:

Yes, much like in 1998,  Thailand looks like it will be the shoe that finally dropped.

for a number of reasons Thailand looks to be the most vulnerable economy in SE Asia (again) in this crisis.

As i work and do some business here i hope i am wrong but ,somehow, sadly, i dont think i will be.

I think reality is beginning to dawn on on local business, so hence, the confidence figures quoted above. 

Thai fundamentals are still good, low debt ratio to GDP and plenty of foreign reserves. Trump is banging the war drum again about new tariffs for China so Thailand will profit from that as will Vietnam etc. but the industrial infrastructure in place in Thailand tops them all so I fear that not only will the Baht not fall it will strengthen because the West is in dire straights. France and Germany are heavily reliant on exports and the car industry (whose got the money to buy?) and the UK economy is four fifths service industry, 70% of which are near collapse, America is just a general basket case, heads in the sand and no plan. Against this backdrop Thailand looks good even though the tourist industry is nigh on finished they can take up a lot of slack by taking China's place as the workbank of the West if they play their cards right.

[uli65]

you have very weird dreams

[Maitdjai]

13 minutes ago, soalbundy said:

Thai fundamentals are still good, low debt ratio to GDP and plenty of foreign reserves. Trump is banging the war drum again about new tariffs for China so Thailand will profit from that as will Vietnam etc. but the industrial infrastructure in place in Thailand tops them all so I fear that not only will the Baht not fall it will strengthen because the West is in dire straights. France and Germany are heavily reliant on exports and the car industry (whose got the money to buy?) and the UK economy is four fifths service industry, 70% of which are near collapse, America is just a general basket case, heads in the sand and no plan. Against this backdrop Thailand looks good even though the tourist industry is nigh on finished they can take up a lot of slack by taking China's place as the workbank of the West if they play their cards right.

"If they play their cards right"?

The " fundamentals" may be good for the "Elites", but are not good enough, to balance the economical inability of the current government. The only solutions they had and will have, is simply obey their master in the north, "Waiting" for help and "sell" it as a great "Breakthrough".

Beside this, long empty speeches, new commissions for peanuts, rolling the dice nearly every day, hoping for a lucky number and changing rules by that.

They can't even organize the 5000 Baht handout, for example.

Though here is the question, if they're not capable, or just don't want to?

[Walker88]

3 hours ago, soalbundy said:

Thai fundamentals are still good, low debt ratio to GDP and plenty of foreign reserves. Trump is banging the war drum again about new tariffs for China so Thailand will profit from that as will Vietnam etc. but the industrial infrastructure in place in Thailand tops them all so I fear that not only will the Baht not fall it will strengthen because the West is in dire straights. France and Germany are heavily reliant on exports and the car industry (whose got the money to buy?) and the UK economy is four fifths service industry, 70% of which are near collapse, America is just a general basket case, heads in the sand and no plan. Against this backdrop Thailand looks good even though the tourist industry is nigh on finished they can take up a lot of slack by taking China's place as the workbank of the West if they play their cards right.

My view is that CV-19 will shift the economic universe in ways that have not even begun to evidence themselves. I do not think things look good for Thailand, despite the CA surplus and reserves.

 

Two things have become abundantly clear, economically, as a result of this crisis:

 

-maximizing domestic employment is extremely important

-guaranteeing supply lines is of equal importance

 

CV-19 has yet one more fatality:  Globalization

 

Countries have been looking for an excuse for years (leaders, not corporate chiefs) to rein in globalization. CV-19 will give them an argument that resonates with voters, and voters ultimately make the rules. Major economies will move industry back home. They will begin to source at home. Govts will hand out all sort of tax incentives, figuring they've already decimated the national budget anyway. Pundits will begin to quote Henry Ford, who paid workers a decent wage because 'then they become customers'.

 

This is likely to wreak havoc on nations who were export oriented, eliminating markets they had taken for granted. Regarding FX levels, some currencies already have all possible good news priced in, while others have lots of bad news priced in. Baht is one of the former, USD and euro examples of the latter.

 

Also, nations that are the hubs of innovation might try to capture more of the benefits, rather than simply finding a cheap labor market and then getting their tech transferred or simply stolen. One cannot say Thailand has ever been a source of innovation, and it is unlikely to ever become one.

 

Besides the decline of globalization, there is also just a general drop in trade because of lost incomes. The first numbers released came from South Korea, who last week announced a massive 24% drop in exports for the latest month. That is a harbinger of things to come.

 

It may not happen right now, or even in the next month or two, but I suspect the Thai economy is in for a very rough time for the next several years, and I mean that relative to other nations who will also be suffering, albeit less.

 

Of course if asset prices in Thailand suffer a lot, I would expect Chinese investors to step in and essentially turn Thailand into a vassal State of the Motherland. Oddly, the current leadership in Thailand doesn't seem opposed to that.

Edited May 6, 2020 by Walker88
added stuff

[Leaver]

4 hours ago, Walker88 said:

I would expect Chinese investors to step in and essentially turn Thailand into a vassal State of the Motherland.

Thus, making the One Belt One Road initiative a lot cheaper, and with less political opposition.  

[timendres]

19 hours ago, ukrules said:

An image of the rarely seen 'final nail' formation

 

Also know as "falling off a cliff".

[Leaver]

On 5/6/2020 at 7:12 PM, timendres said:

Also know as "falling off a cliff".

Also known as "the fat lady is singing the last verse."  

 

 

Edited May 8, 2020 by Leaver

[Leaver]

On 5/6/2020 at 12:33 PM, Maitdjai said:

The " fundamentals" may be good for the "Elites", but are not good enough, to balance the economical inability of the current government. The only solutions they had and will have, is simply obey their master in the north, "Waiting" for help and "sell" it as a great "Breakthrough".

This describes what the Chinese have done in Cambodia.  

[PFMills]

This is pretty new

 

Deloitte_Economic impact of COVID-19.pdf

[Leaver]

On 5/13/2020 at 5:51 AM, PFMills said:

This is pretty new

 

Deloitte_Economic impact of COVID-19.pdf 2.14 MB · 11 downloads

That's an interesting read.  Paints a bleak picture.