Consumer confidence in decline

A report yesterday by the Taiwan Research Institute (台綜院), a private think tank, showed fears over severe acute respiratory syndrome (SARS) have derailed consumer confidence, which declined by nearly 10 percent in April over the same month last year.

The drop in buyer sentiment shows that consumers are bearish about the nation's economic outlook for the next six months.

"The outbreak of SARS has panicked consumers," said Shia Ben-chang (謝邦昌), a professor of statistics at Fu Jen Catholic University.

Shia said the spread of SARS is expected to push confidence down further.

The mid-April poll, which interviewed 1,172 people by phone, sent the monthly figures down to 73.21 points -- the largest monthly fall in two years. This was down from 78.82 points in March and 80.64 points last April.

The institute has been conducting the survey since 1995 while the government permanently cancelled the release of a quarterly consumer confidence survey in November 2000, saying the poor results reflected a lack of rationality on the part of Taiwanese consumers.

"If the index further drops to between 60 and 70 points, the nation's economy may not improve in the third or fourth quarter," Shia said.

He said that the government has yet to propose constructive solutions to boost consumer confidence. The think tank, therefore, forecast that the index may regain ground if SARS can be quickly contained.

Two men in their 30s interviewed by the Taipei Times yesterday said that the mysterious disease has crimped their spending habits.

"I cancelled a NT$30,000 sightseeing trip to Southeast Asia because of SARS," said a Taipei-based architect surnamed Chen.

He said that the ongoing economic slump has forced him to reduce his monthly spending by about 10 percent.

Another individual also surnamed Chen, who works for the media, said that he was avoiding restaurants following the spread of SARS. The move has saved him some NT$2,000 to NT$3,000 in monthly meal costs.

Two women polled by the Taipei Times yesterday said SARS had done little to stem their buying habits.

"I usually make two sightseeing trips a year and I won't be deterred by the disease from making trips or eating out," said Tina Lin (林姿文), a 30-year-old bank worker.

Lin said that outside factors such as the Iraqi war, the SARS outbreak and the economic downturn were not relevant to her daily purchasing activities.

Lin's remarks were echoed by Yang Chin-yi (楊靜宜), a 25-year-old student who said that "I buy whatever I need to buy, as long as it's within my budget."

The survey also found that people were growing pessimistic about future job opportunities and the performance of the stock market.

Over 66 percent of respondents said that the country's economic prospects are in the decline while 35 percent said that their personal finances may deteriorate in the next half year.

Nevertheless, respondents showed growing interest in making major purchases such as houses, cars, computers and electronic appliances, with over 43 percent believing that the next six month will be a good time to buy.

"Such a mentality may have something to do with the availability of low-interest loans," the survey said.