Domestic demand picks up in Thailand

Things are looking good for business with volume sales for basic consumer products up by 8%.

Maybank Kim Eng Securities said:

Strong rebound in Jan/Feb12 production activities from the 4Q11 dip amidst 0.6% unemployment rate argues for a positive outlook in income and consumption. With inflation, though abating somewhat, still remaining high especially in food items, basic retailers could deliver stronger-than-expected 1Q12 earnings.

We noted that in Jan12 the recovery in domestic sales (volume basis) started slow across the board except in items used in home repair & maintenance, and given the soft farm income trend in that month the data seem to point to pressure on disposable income.

However, domestic sales, in volume terms, bounced strongly in Feb12 in nearly all product groups so that the 2M12 volume sales for basic consumer products rose by 8%Y/Y, personal care by 8%Y/Y and home improvement items by 9%Y/Y, by our calculation.