Thailand's industrial sentiment rose for a third straight month in August to the highest level in more than two years, boosted by improved economic activity and a rebound in tourism as COVID-19 curbs were eased, a business group said on Tuesday.

The Federation of Thai Industries (FTI) said its industries sentiment index rose to 90.5 last month from 89.0 in July, reaching the highest level since January 2020.

The sentiment index returned to its pre-pandemic level and the trend should continue following the recovery of the tourism sector, FTI chairman Kriengkrai Thiennukul told a briefing.

"Economic activity is back to normal and domestic consumption is increasing, reflecting in steady demand for industrial products," he said.

A reopening to foreign tourist arrivals and government support on domestic travel also bolstered sentiment, he said. The government is aiming for 10 million foreign tourists this year, up from just 428,000 visitors last year.

However, the industrial sector was still concerned over a global slowdown, rising costs, a shortage of microchips and workers, alongside newly approved wage increases, he said. (Reporting by Satawasin Staporncharnchai Editing by Ed Davies)