Thailand's industrial sentiment improved for the second straight month in June, reflecting a recovery in the country's battered industrial sector, including its lucrative automotive business.

The Thai Industries Sentiment Index (TISI) rose for the second consecutive month to 88.4 in June, according to the Federation of Thai Industries, which conducted a survey among some 1,100 industrial operators. The index was at 85.1 in May, when sentiment improved for the first time in seven months.

The political situation in the country has stabilized, the trade group noted as one of the reasons for improved sentiment. The military launched a coup on May 22 after monthslong street protests and legal battles against then-Prime Minister Yingluck Shinawatra that ultimately led her to be ousted. In addition, a nighttime curfew imposed early after the coup was lifted and production in many sectors has risen, the group said in a statement.

However, the report found that Thai industries remain worried about the U.S.'s recent downgrade of Thailand to the lowest "Tier 3" ranking in its annual Trafficking in Persons Report. The step means that the U.S. can withhold some non-humanitarian and non-trade-related aid.

Also in June, Thailand's vehicle production totaled 160,452 units, a 26.1% drop from a year ago, but an 8.41% rise from May. The rise reflected an increase in auto exports, the FTI's Automotive Industry Club said in a statement.

In terms of vehicle sales, domestic distribution amounted to 73,799 units in June, a 30.4% year-over-year decline but a 5.9% increase from a month earlier.

Meanwhile, Thailand exported 103,946 vehicles in June — a 6.57% on-year rise and a 9.66% on-month increase, resulting from shipments to Europe and North America last month, according to the auto club.