The index dropped from 90.3 in November to 88.3 in December, the chairman said, its lowest point since December 2011.
The FTI conducted an industry confidence survey of manufacturers in various industrial groups in December.
Mr Payungsak attributed the decline in industry confidence to the decline in overall domestic orders, sales volume, output, poor business performance and particularly the manufacturers’ concerns over the current political turmoil.
The manufacturers were worried that if the political turbulence was prolonged, it would result in a slowdown in economic activities and domestic consumption and it would also delay orders by Thailand’s trade partners. Increasing production costs and oil prices also eroded manufacturers’ confidence, he said.
The FTI chief said the survey found that manufacturers want the government to work to settle the drawn out political dispute by peaceful means as soon as possible.
The manufacturers also wanted the government to come up with measures to stimulate domestic consumption and help find financial sources to provide soft loans for small and medium enterprises (SMEs) to improve their production efficiency, he added.