The consumer confidence index fell for the third consecutive month to 79.88 points this month, from 84.04 last month, with all sub-indexes recording declines as a volatile stock market and rising unemployment deepen unease, according to a National Central University survey released yesterday.
The stock investment sub-index reported the steepest drop, falling to 59.1 points this month from 67 last month, the monthly survey indicated.
The TAIEX has shed 9 percent so far this month, closing below the 7,000-point mark at 6,898.78 despite its 1.7 percent rebound yesterday, Taiwan Stock Exchange data showed.
The confidence gauge on the job market outlook retreated to 104.3 points this month, from 111.95 last month, the survey showed, after business downsizing or closures pushed the nation’s unemployment rate up to 4.3 percent last month.
The job market is widely expected to deteriorate going forward as more manufacturers might shrink payrolls to save costs after filling orders for the Christmas season.
The sub-index on purchases of durable goods reported the third-biggest decline of 5 points to 95.95 this month, from 100.95 last month, the survey found, suggesting that fewer people plan to make big-item purchases in the coming six months.
The sentiment could drive vendors to lower inventory levels, protracting the correction cycle.
The economic outlook sub-index stood at 85.95 this month, down 2.4 points from last month, at 88.35, the survey indicated, as people turn more pessimistic as the European sovereign debt crisis escalates.
Keith Wade, chief economist at London-based Schroders Investment Management Co, said via a video conference yesterday that the eurozone would slip into a recession next year, if not this year.
That could hurt China, as its exports to the eurozone account for 7.3 percent of its GDP, Wade said.
Whether the Chinese economy experiences a soft landing would have a significant bearing on Taiwan, which ships more than 40 percent of its exports to China, said Anita Wang (王瀚瑩), an associate vice president at Schroders Taiwan.
“It is difficult to size up the impact before the debt crisis settles,” Wang said. “A lasting solution remains evasive as long as Germany and France fail to iron out their differences.”
The consumer prices sub--index dropped to 50.3 this month, from 1.55 last month, on easing inflationary pressure, the survey showed.
The confidence gauge on household income prospects edged down 0.75 points to 83.7 this month, making it the least affected indicator thus far, the survey said.
The survey polled 2,408 Taiwanese aged 20 and above from Nov. 19 to 22 and had a margin of error of 2 percent.
A score below 100 suggests pessimism, while a value above the threshold indicates optimism.
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