The poll in June resulted in the sixth straight monthly decline in the Consumer Confidence Index (CCI), inching down from 72.6 points in May to 71.6 last month, the lowest in 25 months. A level below 100 reflects weak consumer sentiment.

“The decline in consumer confidence was due mainly to worries about the impact of Brexit [UK citizens’ vote to leave the European Union] on the Thai economy and export growth,” Thanavath Phonvichai, director of the UTCC’s Economic and Business Forecasting Centre, said yesterday.

Besides weak consumer confidence, rising unemployment is also worrisome, as the jobless rate in May exceeded 1 per cent for the first time since 2010.

According to the National Statistical Office, the unemployment rate in May was 1.2 per cent, with about 300,000-450,000 people out of work. The average unemployment rate for the past five years was 0.6-0.9 per cent.

Higher unemployment reflected lower business income and the fragile economy from lower spending confidence. Enterprises have not created new employment, with the result that many new graduates could not find a job, Thanavath said.

He added that the recent case of Toyota (Thailand) laying off 1,000 employees had resulted from lower sales and a changing manufacturing structure to rely more on automation. This indicates that more unemployment could be seen in the future.

Based on the survey of 2,249 respondents, the CCI sub-index for the future dropped from 89 in May to 87.6 in June, while the sub-index on future incomes also decreased from 67.7 to 66.5.

Because of the weak consumer confidence, gross domestic product this year could grow more slowly than the previous expectation of 3-3.5 per cent, at 2.7-3 per cent.

The UTCC poll also found bad news for the retail industry, as consumers believe it is the worst time in almost seven years to buy a new car and the worst in more than two years to purchase a new house.

Respondents also did not want to invest in or start up a business or even travel anywhere, as confidence in those activities was at its lowest level in nine months.

However, there are some positive factors to encourage long-term consumer confidence as some crop prices have risen and drought-related problems have been relieved after the rainy season began in May.

Thanavath said consumer confidence could increase slightly as higher crop prices raise spending power among farming families, who account for the majority of the population.

To stimulate economic growth, he said the government needed to accelerate its budget disbursements and closely monitor fluctuating exchange rates, which could affect export growth.