Survey shows economic uncertainty on the rise

UNGREAT EXPECTATIONS::The Cathay Financial poll showed growing pessimism among the public toward the economy, which the firm attributed to weak exports

By Crystal Hsu  /  Staff reporter

Fri, May 17, 2013 - Page 14

The public became increasingly uncertain about the nation’s economy and job market this month after exports contraced 1.9 percent annually last month and manufacturers became less upbeat about their business prospects, a Cathay Financial Holdings Co (國泰金控) survey showed yesterday.

The survey found that 38 percent of respondents think it is difficult to find a job, outnumbering the 14 percent who took an optimistic view.

About 37 percent of those polled expect job-hunting to become increasingly difficult over the next six months, while 14 percent predicted that it would become easier, the poll showed.

“The fall in the employment sub-index is the steepest in 12 months, a decline that is attributable to disappointing export figures,” said Achilles Chen (陳欽奇), an assistant manager at Cathay Financial’s economic research department.

The Taiwan Institute of Economic Research’s (TIER, 台經院) cyclical monitor for the manufacturing industry flashed a “blue” signal, which also weighed down economic sentiment since the color suggests sluggish business, Chen said.

Exports account for 70 percent of the nation’s GDP and companies could refrain from making investments or expansing if they expect external demand to weaken.

About 35 percent of those polled said they believe the economy would remain unchanged in the next six months, while 26.3 percent believe it would deteriorate and 33.5 percent expect it to improve.

The findings affirmed the weakening sentiment recorded a month ago, Chen said.

Due to this pervailing pessimism, 39 percent of respondents indicated plans to cut down on durable goods purchases, while 30 percent said they aimed to decrease their big-ticket item expenditures, the survey said.

Only 17.5 percent voiced more willingness to buy durable goods and 13 percent to increase big-ticket item consumption, the survey said.

A majority of the respondents, 53.4 percent, intend to maintain their cash positions, while 28.7 percent voiced plans to trim stock holdings and 18 percent indicated a willingness to increase their risky asset holdings, the survey showed.

About 54 percent of respondents linked the current sluggish stock market turnover to weak economic fundamentals, while 31.5 percent pinned the blame on unfavorable policy such as the capital gains tax on securities investments.

The survey was conducted from May 1 to May 7, and polled 14,158 Cathay Financial customers via e-mail.