Thailand Industrial Sentiment Drops Amid Floods and Energy Costs

The Federation of Thai Industries reported that Thailand's industrial sentiment index fell to 89.9 in October, down from 90.7 in September. This decline was driven by production disruptions caused by flooding in farming areas, which specifically impacted the processed food industry, and rising energy costs. Diesel and liquefied natural gas prices increased by 6.6% and 9.3% respectively.

Logistical challenges further strained the sector as surges in advance orders led to congestion and shipment delays at Laem Chabang port. Small and medium-sized enterprises faced additional pressure from contracting credit.

Despite these immediate setbacks, investment sentiment remains positive, with investment promotion applications increasing 28% year-on-year through September 2026. The Federation of Thai Industries forecasts a recovery to 98.5 over the next three months. This anticipated rebound relies on expected government excise tax cuts on fuel and new measures to boost solar power and domestic car production.