Economic confidence is still weak

By Crystal Hsu  /  Staff reporter

Tue, Nov 19, 2013 - Page 13

The public is less gloomy about the nation’s economy this month after leading economic indicators showed mild improvement, but sentiment remains generally weak, a Cathay Financial Holding Co (國泰金控) survey showed yesterday.

About 39 percent of respondents expect the economy to deteriorate in the coming six months, falling from the 48 percent in a poll conducted one month earlier, the survey found.

About 21.7 percent hold an optimistic view and 32.1 percent are neutral about the economy’s outlook, the survey found.

Cathay Financial economic research department assistant manager Achilles Chen (陳欽奇) attributed the sentiment upturn to positive growth in export orders last month, which last month rose 5.8 percent month-on-month and 2 percent year-on-year to US$38.42 billion.

The US Federal Reserve’s recent decision to maintain quantitative easing has also helped boost Wall Street and bourses across the world, Chen said.

However, Cathay Financial said it may still have to revise down its forecast for the nation’s GDP growth this year below the 2 percent, from its September estimate of 2.27 percent, to reflect recent weak data, Chen said.

Meanwhile, 45.2 percent of respondents expect job hunting to become more difficult in the next six months, higher than the 37 percent of respondents with neutral views, the survey said.

Only 8.7 percent of respondent thought it was likely to become easier.

A large majority, 64.5 percent, said their wages were likely to remain unchanged in the coming six months, while 32.8 percent said they may decrease and another 21.4 percent said they may increase, according to the survey.

The general lack of confidence drove 43.5 percent of the respondents to paint now as the right time to sell houses, whereas 75.1 percent believe it is unwise to buy at the moment, the survey indicated.

“The mismatch in sentiment may suppress housing prices and slow transactions,” Chen said.

Still, 52.3 percent of the respondents expect housing prices to climb by at least 3 percent in the next six months, higher than the 49.4 percent of respondents reported a year ago.

As for stock investment, 34.1 percent believe the TAIEX would fall in the coming six months, outnumbering the 22.6 percent who believe it will rise, the survey showed.

Consequently, 29.8 percent of respondents voiced their intention to cut stock investment, while 15.6 percent intend to up stakes, the survey said.

About 42.7 percent indicated less interest in buying durable goods in the coming six months, while 32.8 percent plan to minimize big-ticket item purchases, the survey said.

The survey polled 23,547 Cathay Financial customers via e-mail from Nov. 1 to Nov. 7.