Business Sector Confidence Continues To Drop In July

Business sector confidence continues to drop in July

BANGKOK: -- Business sector confidence in Thailand continued to decline through July upon concerns over continuing political uncertainties fuelled by a spate of clashes between anti- and pro-government groups of demonstrators, according to the Bank of Thailand.

The central bank said that an economic data exchange programme conducted with the private sector showed total sales in the business sector and private spending and investment in the second quarter slowed down from the previous quarter since raw material costs had continued to rise without interruption.

The private sector viewed that local demand in the second half of this year would decline from that in the first half of the year.

Amid economic uncertainties, the private sector also gave a priority to increasing production efficiency and using greater caution in conducting business operations.

Private spending in the second quarter slowed from the previous quarter. It could be witnessed by the decline total sales of consumer products since purchasing power of people had reduced thanks to higher living costs and mounting concerns over the inflation hike.

For the remaining period of 2008, entrepreneurs projected that personal spending would also drop since most consumer goods producers had already raised retail prices and were attempting to keep them unchanged until the end of this year.

Regarding investment, most entrepreneurs had still withheld making investment decisions because of uncertain risk factors in production costs, continued oil price hikes, and the problematic political situation.

The property sector in the first half of the year had nonetheless expanded satisfactorily, boosted by reductions in specific business taxes, ownership transfers and mortgage fees.

However, the supply is expected to slow in the second half of the year because building materials costs have increased.

-- TNA 2008-07-31