Sat, Jan 28, 2006 - Page 5 News List

Exports bolster consumer confidence

GREAT EXPECTATIONS Four of the six consumer-confidence sub-indices soared in the fourth quarter, with the outlook for household finances showing the biggest increase

By Jackie Lin  /  STAFF REPORTER

Bolstered by strong exports in the fourth quarter, the nation's consumer confidence index (CCI) this month edged up 0.97 points from last month to 73.14, according to a report released by National Central University yesterday.

The index has been fluctuating between 71 and 75 since March last year as no major economic stimulus policies were presented, the report showed.

The monthly survey was conducted to gauge 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.

Only two sub-indices -- stock performance and consumer price fluctuations -- took minor dips, while the other four were up, with more respondents expressing bullish views compared with last month.

The biggest increase was recorded in household finances, with 41.6 percent of the polled expecting their family's economic conditions to remain unchanged or take a turn for the better in the next six months, up from 36.6 percent in the previous survey.

Strengthened confidence in job outlooks is also shown in the report, as 63.8 percent expressed optimism on employment, compared with 59.3 percent last month.

This should come as no surprise, since Taiwan's unemployment rate fell to a five-year low of 3.86 percent last month from 3.94 percent in the previous month, owing to a decline in first-time job seekers and reduced business closures, the government reported on Monday.

"The slight increase in this month's CCI was boosted by robust exports and strong economic growth in the fourth quarter. Domestic demand is comparatively weaker, solely bolstered by the dynamic real-estate market," said the author of the report, Chu Yun-peng (朱雲鵬), head of the university's Research Center for Taiwan Economic Development.

Export orders grew more than 20 percent for a fifth consecutive month last month as global demand for liquid-crystal-display panels and semiconductors increased, the Ministry of Economic Affairs said on Tuesday.

For the whole of last year, export orders totaled US$256.39 billion, up 19.2 percent from 2004, the ministry added.

People's concerns about price hikes remain as the ministry is still undecided about whether to raise water and electricity rates after the Lunar New Year holidays.

A whopping 89.8 percent of the respondents expressed concern that consumer prices will rise in the next six months, the report said.

The survey interviewed 2,606 citizens between Jan. 18 and 22. Although the survey coincided with the Cabinet reshuffle, Chu said the results should not be used to reflect people's confidence in the new Cabinet team, as the complete lineup was not revealed until Tuesday.

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