The nation’s consumer confidence hit a 20-month high this month with public sentiment toward stock investment over the next six months showing the strongest sign of improvement, a report released by National Central University said yesterday.
The consumer confidence index (CCI) rose for the fifth consecutive month to 65.39 points this month, up from 62.47 last month, the university’s Research Center for Taiwan Economic Development said in the report.
“The public has turned upbeat about the economic recovery,” center director Hsu Chih-chiang (徐之強) said by telephone yesterday. “The index has seen an upward trend since February.”
Investors were mostly upbeat about equity investments for the next half year, with its projected sub-index edging up 9.5 points to 98.5 this month.
More than 40 percent of respondents said they would invest in stocks, up from 34.8 percent last month, while 42.3 percent said they would avoid the market in the near future, down from 45.3 percent last month, the report said.
“The public is more confident about the stock market because of companies’ recent increased profits and increasing export orders,” Hsu said, adding that the government’s relaxed cross-strait policies, such as a proposed economic pact with China, have increased public expectations about capital inflow from China.
The CCI benchmark gauges public expectations relating to stock performance, household finances, durable goods, job opportunities, consumer price fluctuations and the economic outlook over the next six months.
This month’s survey — which polled 2,421 people over the age of 20 across the nation between Dec. 19 and last Tuesday — showed improvements on all sub-indexes except consumer price outlook, which dropped two points from last month to 41.3 points.
The economic outlook sub-index this month stood at 60.95 points, up 4.25 from last month, and the sub-index for projected durable goods purchases indicated growth of 2.65 points to 88.05 this month, the report said.
Public opinion on the job market over the next six months also edged up 1.6 points to 43.45 this month with the household finances sub-index gaining 1.55 points to 61.1, the report said.
Although the CCI rose to the highest level since May last year with five of the six sub-indexes exceeding last month’s levels, consumers remain pessimistic about Taiwan’s overall economic prospects given that the sub-indexes were all below 100 points, the Taoyuan-based research center said.
Since the sub-index for projected stock investment for the next six months has neared 100 points this month, it may soon switch to optimism, the center said.
A CCI figure of less than 100 points indicates that the public is pessimistic about the outlook for the next six months, while a score of between 100 points and 200 points demonstrates optimism, the center said.
“In my opinion, we should focus on the overall trend instead of looking at the benchmark of 100 points as the sub-indexes have never surpassed 100 points over the past decade,” Hsu said.
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