The Thai Industries Sentiment Index (TISI) rose for the sixth consecutive month, hitting 106 points in May from 104 in April.
The confidence index has finished above 100 points for four straight months, signalling that production and the economy will continue to grow.
May’s industry confidence survey by the Federation of Thai Industries (FTI) involved 1,110 manufacturers in 42 industry groups.
“This shows that business operators believe the Thai economy still has the potential to grow, especially when the flood situation returns to normal,” said FTI chair Payungsak Chartsutthipol.
Concerns about rising costs, labour shortages, political issues and the euro zone remain.
Payungsak said the outlook for the TISI will depend on the formation of a Greek government, which should be clear next month, while Spain and Italy are the next concerns.
Payungsak remains confident in the possibility of this year’s exports growing by 15 percent.
“Although the target is challenging due to the European debt crisis, we still believe the target is achievable,” he said.
Payungsak said Thailand will be affected by the euro-zone crisis less than other countries, as Thai products have high quality and are necessary for consumption.
The only worrying sector is jewellery, orders for which have dropped considerably from the EU and the Middle East.
“Nonetheless, business operators have not been staying still and are trying to find new markets, while there is still a six-month period for them to increase orders in existing markets,” said Payungsak, adding that some are increasing production at factories outside the country while lowering production at plants in Thailand.
Food, for instance, can go anywhere in the world.
However, the University of the Thai Chamber of Commerce on Tuesday said Thailand will probably miss this year’s export growth target of 15 percent.
It said the euro-zone crisis could shave 150 billion baht off Thailand’s exports in the worst-case scenario.
Some are suggesting exports will not grow by 15 percent this year, but Payungsak said: “Manufacturers know best, and they have information on orders even before statistics come out. Although it remains a challenge, business operators are still maintaining the target of 15 percent.”