FTI says recovery talk is premature
Bangkok Post – 24 June 2009
VICHAYA PITSUWAN
The Federation of Thai Industries (FTI) expects no definite signs of global recovery for two or three more months, said chairman Santi Vilassakdanont.
"Despite the past three months, we could see export orders improving in some industries. It remains to be seen if increasing orders continue into the next two to three months before a sustainable improvement can be declared," he said.
A strong rebound in the petrochemical industry and a slight improvement in the automotive, electronics and electrical parts, pharmaceutical, food, packaging and steel industries over the last two months were reported in an FTI survey of its members, said Mr Santi.
"Though the responses are positive, we are still not sure if the return in orders will be sustained. These are short-term orders. Long-term orders of at least six months are needed for a return to normal," he said.
"This tells us that foreign buyers are still uncertain over an economic recovery too. If improving orders continue for the next two to three months, then we will be able to feel better."
The global economy seems to be slowly improving, he said.
In the local market, the government's stimulus budget is due to be spent by the year-end and to take effect early next year, improving businesses from the third quarter and increasingly in the fourth quarter next year, said Mr Santi.
But the industrial sector has already started to rebound, with the Thailand Industrial Sentiment Index (TISI) up to 78.5 in May from 76.3 in April.
The TISI is now forecast to climb in the next three months to 93.5 points, raised from an earlier prediction of 81 by improving local and export orders.
Sales volumes, selling prices and business performance are also expected to improve in the next three month, despite the risk of political problems and an increase in production costs due to the higher price of crude, said Mr Santi.
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