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Consumer confidence declines

The nation's consumer confidence dipped this month to the lowest level in 10 months amid growing concerns over the cross-strait relationship and a pessimistic sentiment toward the stock market, a consumer research institute at National Central University said yesterday.

"The consumer confidence index was mainly driven down by people's worries about stock investments in the next six months," Chu Yun-peng (朱雲鵬), head of the Research Center for Taiwan Economic Development, said at a press conference.

In the survey conducted between May 19 and May 22, consumer confidence in buying stocks reached its lowest level since November 2001, with 62.7 percent of the respondents saying they would stay away from the stock market in the near term, up from 51.7 percent last month, Chu said.

Rising commodity prices remained another concern, the survey showed, as 68.3 percent of the respondents were worried that prices would continue to climb in the next six months, compared with 66.1 percent shown in last month's survey.

Although the unemployment rate dropped to 4.36 percent last month -- to its lowest level since June 2001 -- public confidence in job prospects dropped slightly this month.

Day Jaw-yang (戴肇洋), deputy director of Research Division III at the Taiwan Research Institute (台綜院), said the government should help job seekers develop skills to brace for the digital era.

Day said the government's short-term job-creation scheme is not a long-term solution.

"That solution is like morphine -- meaningless," he said.

While the respondents also showed weaker confidence in their household finances for the near future, they said the domestic economic outlook is picking up and there are good opportunities to purchase durable goods in the latter half of the year, Chu said.

The poll also surveyed public expectations about the real estate market. Chu said the nation's economic development was cited by 24.5 percent of the respondents as the most important factor affecting the property market.

Other factors that were also key to purchasing property included Taiwan's relations with China (21.6 percent) and stock performances (18 percent), he said.

A local property developer, however, said stock fluctuations always outweigh cross-strait relations and economic prospects in determining performances in the real-estate sector.

"As long as the TAIEX rises for five consecutive days, the number of housing units sold will rise," said Timothy Ma (馬玉山), chairman of Kingdom Construction Corp (冠德).

Within the next 12 months, 38.8 percent of people said good opportunities have come for buying houses, compared with 26.5 percent who upheld the negative.

Liang Kuo-yuan (梁國源), president of Polaris Research Institute (寶華綜合經濟研究院), believes this indicates that the public remains confident in the nation's economy despite short-term uncertainties.
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