Public confidence in the domestic economy and stock market this month weakened for a fifth straight month, boding ill for consumer spending, a survey by Cathay Financial Holding Co (國泰金控) showed yesterday.
About 50 percent of respondents expect the economy to deteriorate in the coming six months, while 16 percent are looking forward to an improvement, the survey found.
Another 29.4 percent said the economy would stay the same, while 5.5 percent had no opinion, according to the online survey, which polled 17,375 people between July 1 and July 7.
Public sentiment was soft even though the nation’s economic bellwethers point upward.
“The [global] tariff rows have taken a toll on public confidence and risk appetite, while interest rate hikes by the US Federal Reserve have added to volatility across global stock markets,” Cathay Financial economic research department assistant manager Achilles Chen (陳欽奇) said, adding that the economic confidence slipped to the lowest level since November 2015.
Furthermore, 45.6 percent of respondents said it would be more difficult to find jobs, while 8.7 percent said job hunting would become easier, the survey showed.
The conservative sentiment might drive people to avoid purchases of durable goods or big-ticket items, Chen said.
About 41 percent said they plan to cut durable goods consumption in next six months and 32.2 percent intend to slash their budget on big-ticket items, the survey showed.
Inflation expectations might lend support to belt-tightening, as an overwhelming 79.2 percent expect consumer prices to rise by 3 to 6 percent in the next six months.
Nearly 64 percent of respondents expect their income to remain the same, more than 20 percent voiced concerns it might drop and 23.7 percent expect an increase, the survey showed.
The public also has a dim view of the local bourse, with 44 percent expecting an upswing for the TAIEX in the next six months and 17.3 percent forecasting a pullback, it said.
The sentiment suggested a retreat in risk appetite, Chen said.
Nearly 30 percent said they would trim their stock holdings, 17.1 percent indicated a willingness to raise their stakes and 53.3 percent preferred no change, the survey found.
The risk preference is the lowest since February last year, Chen said.
The TAIEX is likely to meet resistance between 10,500 and 11,000 points and find support between 9,000 and 9,500, according to the survey.
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