The nation’s consumer confidence index dropped to 77.71 this month, its lowest level in three years, as consumers turn more pessimistic on the outlook of stock investments, a survey by National Central University showed yesterday.
The figure dropped 1.24 points from last month’s 78.95, with all six sub-indices falling, the survey showed.
The sub-index on stock investments declined the most, registering a drop of 5.7 points from last month to 66.9 this month.
“Stock investors turned gloomy this month after Trump was declared the winner of the US presidential election,” said Dachrahn Wu (吳大任), a professor of economics and director of the university’s Research Center for Taiwan Economic Development, which helped conduct the survey.
Investors were wary that foreign institutional funds might move assets from the local market amid fears of a rise in US protectionism, Wu told the Taipei Times by telephone yesterday.
In addition, expectations of interest rate hikes by the US Federal Reserve next month also weakened confidence in local shares, he said, with such a move prompting global investors to adjust their portfolios.
However, both factors might have only a short-term effect, while Taipei’s policies on cross-strait relations would affect local customers’ confidence in the near future, as China is expected to rebalance power in the region following Trump’s victory, he added.
The sub-index on inflation registered the second-biggest decline, down 0.95 points to 51.55, as fruit and vegetable prices remain high following two typhoons in September.
The sub-index on economic outlook dropped 0.2 points to 72.65, while the indicator on household income edged down 0.05 points to 78.8, the survey showed.
The sub-index on durable goods, which mainly suggests Taiwanese consumers’ confidence in the housing market, decreased 0.1 points to 88.65.
Meanwhile, the sub-index for confidence in the labor market fell by 0.45 points to 107.7, suggesting local consumers remain upbeat about job opportunities in the coming six months despite the mild retreat.
Confidence scores of between zero and 100 indicate pessimism, while a score of between 100 and 200 indicates optimism.
Wu attributed the relative optimism over job opportunities to the small recovery in the nation’s economy since the second quarter of this year.
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