Tue, Feb 03, 2004 - Page 10 News List

Consumers adopt a wait-and-see approach: survey

By Joyce Huang  /  STAFF REPORTER

The nation's consumer confidence index fell by 0.54 percentage points to 82.44 points last month from December's 82.98, a National Central University survey found yesterday.

"This shows that local consumers adopted a wait-and-see attitude in purchasing activities," said Chu Yun-peng (朱雲鵬), head of the university's research center for Taiwan Economic Development.

According to Chu, the index rose by 4.71 percentage points compared to one year earlier, suggesting that an uptrend in local consumption is foreseeable.

Last year's SARS outbreak caused the index to plummet to 72.34 points, while consumers showed another wave of pessimism in November to upset the index again, Chu said.

The research center's indexes gauge the public's expectations for the next six months on stock performance, consumer price fluctuations, household income, employment, economic outlook and durable goods.

The survey found that consumers were worried that commodity prices are on the rise.

Consumers are not optimistic about stock investments, the economic outlook and an employment recovery.

Chu said that over 60 percent of polled respondents expressed a negative view of the nation's job prospects while only 5 percent were upbeat.

As a leading indicator of where the economy's heading, yesterday's index, however, stood in slight contrast to the nation's estimates on improving economic fundamentals, including economic growth.

Hu Chung-ying (胡仲英), director-general of the Council for Economic Planning and Development's economic research arm, said yesterday that non-economic factors are rocking consumer confidence.

Hu said the bird flu outbreak and the government's announcement of a possible water shortage last month posed a threat to confidence.

Uncertainty about the presidential election in March as well as cross-strait tensions also contributed to the index's slip, Hu added.

Wu Chung-shu (吳中書), a research fellow at Academia Sinica, said the public appears to have misinterpreted the expected consumer price rise, which would actually help the domestic economy.

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