Tue, May 29, 2012 - Page 12 News List

Consumer confidence falls on stock market worries

By Amy Su  /  Staff reporter

People wander around a shopping mall yesterday. According to National Central University, Taiwan’s Consumer Confidence Index fell this month.

Photo: CNA

The consumer confidence index (CCI) fell for a second straight month this month, mainly due to worsening confidence in the local stock market, a National Central University survey showed yesterday.

The index was down 1.31 points to 77.61 this month, marking its lowest level since December last year, the survey showed.

The CCI benchmark gauges public expectations about the stock market, household finances, durable goods, job opportunities, consumer prices and the economic outlook for the next six months.

This month’s survey — which polled 2,432 people over the age of 20 from May 19 to May 21 — only showed improving sentiment on job opportunities, while uncertainty over the other five sectors expanded, the university’s Research Center for Taiwan Economic Development said.

“The results indicated survey respondents remained cautious on the economy over the near future,” center director Dachrahn Wu (吳大任) said by telephone.

The stock market sub-index led the declines for the second consecutive month this month by plunging 5.1 points to 54, marking its lowest level since January, the center said in a report.

Analysts said the drop was a reaction to major volatility in the domestic and global stock markets in recent months and uncertainty over the European debt crisis.

In addition, a government proposal to introduce a capital gains tax on stock investments was also a factor, analysts said.

Consumers are expected to remain pessimistic about the stock market’s prospects in the months ahead, particularly if the transaction volume shrinks further, according to analysts.

In the latest CCI report, the durable goods sub-index dropped 2.55 points from a month ago to 88.85, an indication the public held a pessimistic view on the housing market over the near future.

The economic outlook sub-index fell 1.4 points to 81.95, while the sub-indices for household finances and consumer prices slid 1.35 and 0.5 points respectively to 79.35 and 51.55, the report said.

The job opportunities sub-index rose 2.95 points from a month earlier to 109.95, marking its sixth consecutive monthly increase and an indication that it remains on a modest-growth track, data showed.

However, apart from the sub-index for job opportunities, the other five sub-indices reflected pessimism by weighing under 100 points, an indication that overall confidence remained weak, the center said.

Additional reporting by CNA

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