Thai Business Sentiment Falls to 45.2 as Costs Bite

Thai business sentiment fell in October. The Bank of Thailand's Business Sentiment Index (BSI) dropped to 45.2, down from 48.1 in September, according to central bank data updated on November 2, 2026. Rising costs linked to the Middle East conflict and recent flooding are hitting firms, and smaller businesses are under the most pressure.

Key figures from the Bank of Thailand

A reading of 50 means sentiment is stable, and anything below 50 means conditions are getting worse. October's result is the second monthly fall in a row, after the index reached 49.8 in August. Most sub-indices weakened:

• Performance: 47.5, down from 50.2
• Total order book: 48.0, down from 49.6
• Production: 47.9, down from 51.5
• Employment: 48.9, down from 50.3
• Production costs (inverted): 27.4, down from 33.7, showing much heavier cost pressure

There was one brighter signal. The forward-looking Expected BSI edged up to 51.3 from 50.8, which suggests firms still expect conditions to improve slightly.

War and floods push up costs

The figures came with the central bank's monthly business survey, reported by Money & Banking Magazine. In it, 93% of businesses said they had been affected by the escalating Middle East conflict. Only 5% reported no impact, and 2% said they had benefited.

The main problem is transport. Higher fuel prices and insurance premiums have raised the cost of moving goods by land and sea, and some shipping routes are now longer. The survey says supply chains have held up better than in past crises, as companies find new suppliers and markets.

Floods in September and October added to the strain. Damage to Thai industry was estimated at tens of billions of baht, mostly in the central, eastern and western regions. Farming was hit hardest, and some vegetable prices doubled. The survey also found hotel repairs and a small rise in booking cancellations, which has caused concern for the high season. That matters for tourism-reliant areas such as Phuket.

SMEs feel the squeeze

The survey named high production costs as the number one constraint, and said they make it hard for SMEs to raise their prices. Small and medium-sized enterprises (SMEs) are the most exposed. About 34% of SMEs receive orders less than a month in advance, compared with 22% of large companies, which makes planning and cost control harder. Around 80% of all firms keep no more than three months of stock.

Employment is the area to watch. Some 30% of businesses expect to cut staff, more than double the 14% that plan to hire, while 56% expect no change. On working hours, 22% plan cuts and 13% plan increases.

What it means

The survey suggests businesses are more resilient than in earlier crises. But several shocks at once are squeezing profits, especially for small firms. Earlier signs of strain, such as pressure on Thai restaurants and the slowdown in May, show how quickly costs feed through to local businesses. Entrepreneurs planning new ventures can read our guide on registering a business in Thailand.

Image: Ian Korman, CC BY-SA 4.0, via Wikimedia Commons