THAILAND

Industrial sentiment for December 2011 rose for the first time in four months, but businesses are still wary about high oil prices.

The Thai Industries Sentiment Index for December last year rose from 87.5 in November to 93.7, as companies gradually resumed their production and transport routes, said Payungsak Chartsutthipol, chairman of the Federation of Thai Industries (FTI).

However the index is still below 100, which signals that manufacturer confidence is still uneasy, as some plants in the central region are still unable to resume production even though the floods have receded, he said.

A planned increase in the daily minimum wage and a hike in oil prices were also factors that concerned operators, while the world economy, politics and currency issues are of less worry.

Although the world economy still has problems, it is a large market and Asean is heading in the right direction. There will always be demand for Thailand's major industries such as automotive and food, said Mr Payungsak.

If Thailand is stable this year, it is highly likely GDP growth will reach 5%, he added.

However, he warned business operators to find ways to reduce costs amid the higher wages and oil prices. Construction and farm products require a lot of transportation and will be affected.

Mr Payungsak added the new government reshuffle should focus on preventing future flooding, as foreign investors are monitoring Thai progress.

Last year, the FTI proposed a public-private partnership called Thailand Water Resources Corporation to manage water.