Index of consumer confidence drops to a six-year low

Consumer weakened to a six-year low this month, dragged down by a deteriorating outlook on local stocks, durable goods and economic performance, a report said yesterday.

The index declined for the fourth straight month to 62.58 this month -- the lowest since the 60.91 recorded in October 2001, statistics released by National Central University's Research Center for Taiwan Economic Development showed.

This month's reading was down 0.76 from 63.34 last month.

"A decline in the outlook for the stock market over the next six months is the major reason behind the fall," said Shia Ben-chang (謝邦昌), a professor of statistics and information science at Fu Jen Catholic University, which conducted the survey.

This month's stock market reading dropped to 70.9 from last month's 74.3, representing the biggest decline among the six major sub-indexes, the report said.

More half of respondents thought it wasn't a good time to invest in stocks, the report said.

The outlook for durable goods also posted its fourth straight decline to 108.95, which Shia said was also a warning of falling consumer confidence. While consumers used to buy real estate as a hedge against inflation, they are now holding back on spending on durable items such as houses and cars, he said.

"Rising global oil prices have outpaced limited payroll hikes despite the nation's robust economic growth this year because of strong exports," Shia said.

The economic sub-index fell to 46.35 this month from 46.55 last month, while the household finance sub-index slid to 49 from 49.1 during the same period, signifying a drop in consumer expectations that the economy or their finances would improve.