Thu, Jul 01, 2004 - Page 10 News List

Consumer index recovers from May's 10-mo low

LATEST SURVEY The CCI rose to 76.95 points, a 1.38 point rise from 75.57 in May despite fears of price hikes and corporate defaults

By Joyce Huang  /  STAFF REPORTER

Consumer confidence rose slightly last month after dipping to a 10-month low in May, a consumer research institute at National Central University said yesterday.

"The consumer confidence index [CCI] edged up [last month] after people expressed optimistic sentiments toward the upcoming economic recovery and improving employment," said Chu Yun-peng (朱雲鵬), head of the Research Center for Taiwan Economic Development, at a press conference yesterday.

The CCI hit 76.95 points last month -- a 1.38 point rise from May's 75.57 points, the center's survey concluded yesterday.

The index gauges the public's expectations on stock performance, household finances, durable goods, job opportunities, consumer price fluctuations and the economic outlook for the next six months.

The survey, conducted between June 17 and June 23 with more than 2,000 respondents, found concern over the TAIEX's recent decline.

Respondents said they were worried about repercussions of Procomp Informatics Ltd's (博達科技) default on NT$2.98 billion in corporate bond payments and a possible hike in consumer prices, which helped push down the CCI.

Stock-market prospects saw the biggest fall -- to 50.5 points -- a 6.1 points drop from May's 56.6 points, with respondents pessimistically saying that the next six months will not be a good time to buy stocks.

The survey also showed that approximately 44.4 percent of respondents expressed interest in making short trips of up to two days -- with 55 percent of them favoring domestic trips costing less than NT$10,000 and 33 percent favoring travel abroad and spending between NT$20,000 and NT$60,000.

More than 40 percent of respondents plan to buy cars, new or second-hand.

"This may translate into a potential market size of 5 million domestic tourists and over 700,000 cars," said Shia Ben-chang (謝邦昌), a statistics and information science professor at Fu Jen Catholic University.

Shia was upbeat about future CCI development, saying it should see an upward trend if there are no major political and economic disturbances.

Economic fundamentals remain healthy and that should boost consumer confidence, although people's confidence on stock investments may not be restored soon, Shia said. He cautioned, however, that the index's performance in the second half year may not be as rosy as the first half.

Chu was also upbeat about the future consumer confidence developments, except for short-term uncertainties such as whether the US Fed would raise interest rates. He said a rise of 0.5 percentage points would negatively impact the local capital markets, while a hike of 0.25 percentage points wouldn't have much of an impact.

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