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Consumer confidence in the balance as prices rise

The consumer confidence index this month edged up 0.23 points to 73.38 from last month, although soaring consumer prices could soon start having a negative effect on consumer sentiment, according to a report released by National Central University yesterday.

Among the six components used to gauge the public's expectations for the next six months, two elements -- people's confidence about stock performance and purchases of durable goods -- showed a slight upward trend.

The survey, in which 2,085 people were interviewed between Aug. 18 and Aug. 23, found that 30.3 percent of the respondents appeared bullish about the stock market for the next six months, up from 26.8 percent last month.

The confidence score for stock performance gained 5.3 points from last month to 70.7, the highest point since April last year.

However, the survey showed a lack of investor confidence in the near future.

"The survey was held while the TAIEX was showing some gains, but based on the results of the past several months, we cannot say consumers are very optimistic about the future. They are still adopting a wait-and-see attitude in stock investments," said Shia Ben-chang (謝邦昌), professor of statistics and information science at Fu Jen Catholic University, who was involved in conducting the survey.

"People's confidence remains weak," he added.

While 35.4 percent of the respondents said they think the next six months will be a good time to buy durable goods, including houses, cars and electric appliances, 44.7 percent said their sentiment remained the same as last month.

The other four components of the index -- the public's expectations for household finances, job opportunities, consumer price fluctuations and the domestic economic outlook -- all took a downturn.

As skyrocketing crude oil prices have hurt the nation's manufacturing industry and prompted oil refiners to hike pump prices on gasoline, people's bearish attitudes toward the economy and their household finances should be the main concerns the government will have to address, Shia said.

The index for consumer price fluctuations for the next half of the year dropped 1.15 points to 48, its lowest level ever, and the index for the domestic economic outlook saw the biggest decline of 1.36 points to 63.9, according to the report.
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