SME confidence decreases in Sept

The Nation (6 November 2007)

Small and medium-sized enterprises (SMEs) showed a significant drop in confidence in September, the Office of Small and Medium Enterprise Promotion said yesterday.

Director-general Jhitraporn Techacharn said the Trade and Service Sentiment Index fell from 43.8 points in August to 41.3 points, due to sluggish domestic spending and higher prices for raw materials and oil. The third-quarter index also dropped, to 42.3 points.

Confidence in the Kingdom's economy slid from 32.3 points to 26.2, while confidence in business prospects dropped from 40.9 points to 35.1.

"They showed lower confidence, due to the poor economic conditions that hurt sales and profits," Jhitraporn said.

SMEs in all sectors showed lower confidence, with the largest drops in agriculture, retail trade and retail oil.

In the service sector, tourism and related industries showed the greatest decrease in confidence, due to heavy rains and flooding at tourist destinations and the One-Two-Go plane crash.

However, SMEs believe business will improve over the next three months, with the index reaching 48 points. The index is expected to rise across the board, but particularly for the wholesale, retail-trade and services sectors.

"The confidence index staying below the 50-point level indicates business prospects are not as bright as they should be," Jhitraporn said.

By region, the largest drop in September's index was seen among SMEs in the South, while those in the Northeast and North showed higher confidence than in August.