Wed, Nov 28, 2018 - Page 12 News List

Confidence slumps to 15-month low on trade uncertainty

‘NO SURPRISE’:The job market sub-index dropped below 100, meaning that people expect to face difficulty when job hunting over the next six months

By Crystal Hsu  /  Staff reporter

The consumer confidence index this month weakened to a 15-month low, as the lingering US-China trade war deepens unease over stock investment and other activity, a National Central University survey showed yesterday.

The index shed 1.82 points to 80.13, consistent with the slowdown in most economic bellwethers, the monthly survey showed.

“The decline came as no surprise, since uncertainty tends to build ahead of major elections,” said Dachrahn Wu (吳大任), director of the university’s Research Center for Taiwan Economic Development, which conducts the survey.

The survey polled 2,703 adults from Monday to Friday last week.

The sub-index on stock investment tumbled 7.7 points to 77.6, the lowest since February last year, weighed by disappointing sales of new-generation technology gadgets, notably Apple Inc’s new iPhone series, analysts said.

The local bourse saw a 2.56 percent rebound, but daily turnover shrank considerably, Taiwan Stock Exchange data showed.

Investment sentiment might continue to flounder as the trade row might persist for a while, Wu said.

“The [TAIEX] pullbacks are not all negative as they help raise risk awareness... On the contrary, excessive confidence is not healthy for the market,” Wu said.

The job market outlook reading dropped 1.05 points to 99.85 as people expect more difficulty in finding jobs in the next six months, the survey showed.

Scores lower than 100 suggest pessimism, while values above the threshold indicate optimism.

Declining sentiment is unfavorable for consumer spending, which is necessary to drive the economy as exports slow.

Similarly, the sub-index on durable goods consumption dropped 0.85 points, while the reading on household income dropped 0.3 points, it said.

Volatility across global financial markets is likely having a negative effect on local investors’ wealth.

The consumer prices gauge was 45.5, down 1.05 points from last month, indicating popular discontent with commodity price levels, even though they are holding steady, it said.

The gauge on economic outlook bucked the trend and posted a fractional 0.05 increase from last month, it said.

This is because the GDP might expand more than 2.5 percent for the entire year, even though the pace has lost considerable steam in the second half, it added.

The survey had a confidence level of 95 percent with a 2 percent margin of error.

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