Thai industrial sentiment falls in April on weak demand, wage hike plan

BANGKOK (Reuters) - The Thai industrial sentiment index dropped in April, dented by slowing domestic demand, a government minimum wage hike plan and drought, the Federation of Thai Industries (FTI) said on Wednesday.

The FTI said its industrial sentiment index fell to 90.3 in April from 92.4 the previous month.

The FTI said in a statement that economic uncertainty had affected people's spending while the planned minimum wage rise would increase costs, particularly for smaller businesses.

The federation has asked the government to delay the wage hike as manufacturing remains slow and more than 3.18 million smaller businesses are unable to cope with higher costs.

The government plans to increase the daily minimum wage countrywide to 400 baht ($11) from October, with Prime Minister Srettha Thavisin saying the move is necessary to help workers and spur economic growth.

Business groups have rejected the wage plan, saying it would hurt the economy and competitiveness, and stoke inflation.

The FTI said drought had impacted farm product manufacturing, but tourism remained a supportive factor.

Thailand received 13.16 million foreign tourists from Jan. 1 to May 12, up 39% year-on-year, with Chinese tourists at about 2.6 million, government data shows.

The government is aiming for a record 40 million foreign visitors this year, after recording 28.15 million arrivals last year.

($1 = 36.53 baht)

(Reporting by Orathai Sriring and Kitiphong Thaichareon; Editing by John Mair)

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