Consumer confidence appears to be recovering

After several scandal-ridden companies rocked the stock markets in the past three months, consumers appear to have regained confidence in share investments but they remain pessimistic about the nation's economic outlook for the near term.

The consumer confidence index edged up by 1.82 points from August to 75.68 last month, according to a survey released by officials at National Central University yesterday.

Among the six indicators used to gauge consumer sentiments on business conditions, the stock indicator showed the biggest rise, said Chu Yun-peng (朱雲鵬), head of the Research Center for Taiwan Economic Development at the university.

Chu said 16.03 percent of respondents were bullish about the stock market for the next six months, while 60.91 percent said they would refrain from buying stocks, a dramatic drop from the 75 percent who said in August that they would defer purchases.

"It's predictable that people's confidence in stocks has rebounded as their sentiments dipped to rock bottom in August," said Shia Ben-chang (謝邦昌), professor of statistics and information science at Fu Jen Catholic University, who attended yesterday's press conference.

The monthly survey shows 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 index, which was as high as 85.4 in October last year, has been declining since then, due to a concern over domestic political uncertainty and high oil prices.

It fell to 75.57 in May following the March presidential election and began to rise a little before falling to 73.86 in August.

The latest survey shows that the level of optimism about jobs and purchases of durable goods, including real estate, rose slightly last month.

"This year's real estate market has been the most active since 1998," said Day Jaw-yang (戴肇洋), deputy director of Research Division III at the Taiwan Research Institute (台綜院).

"Nearly 60,000 newly built houses were granted licenses during the first six months this year, compared with only 24,000 licenses in 2001 when the market was in the doldrums," Day said.

Asked about the possible impact on the property market by the central bank's small hike in key interest rates, Shia said that the impact might weigh on the sales of mid-range houses, such as 30-ping (99m2) houses priced around NT$8 million (US$235,000).

The survey, conducted between Sept. 17 and Sept. 22, showed that people are more concerned about the economy, household finances and rising consumer prices, which Chu said might be the result of oil price surges and recent natural disasters.