Stock market rally boosts consumer confidence index

By Crystal Hsu  /  Staff reporter

Thu, Feb 28, 2019 - Page 12

The consumer confidence index rose modestly to 84.69 this month, as people recover some confidence about the economy and stock market thanks to recent rallies on the local bourse, a survey by National Central University (NCU) showed yesterday.

The sentiment improvement came even though major economic barometers disappointed for a third straight month amid a global slowdown.

All sub-readings gained points, with the gauge on stock investment reporting the biggest advance of 1.8 points from last month to 95.6, the survey found.

NCU Research Center for Taiwan Economic Development director Dachrahn Wu (吳大任) said that the confidence pickup is not surprising now that the TAIEX has recovered to above 10,000 points.

“TAIEX movements tend to have a more direct influence than economic data on consumer confidence levels,” Wu said.

Positive developments in trade talks between the US and China also lent support to investment confidence, he said.

People also feel more a bit more optimistic about the economy in the coming six months, with the measure gaining 1.15 points to 83.95, the highest level in 44 months, even though the nation’s exports have contracted for three consecutive months and might not improve in the first half of this year.

The sentiment shift suggests domestic demand would assume the role of main growth driver as external demand flounders, Wu said.

The government has sought to help by introducing subsidies for domestic travel and incentives for corporate investment, he said.

The measure on household incomes in the next six months increased 0.9 points to 89.5, the second-highest level in history, likely backed by year-end bonuses and a wealth effect linked to securities investments, he said.

As a result, people are more willing to buy durable goods, mainly real estate, as the sub-index climbed 0.95 points to 90.85.

The gauge on the outlook for the job market gained 0.5 points to 100.15, while the index on consumer prices rose 1.05 to 48.1.

The findings signal mild inflation and a stable unemployment rate, Wu said.

NCU conducted the telephone survey on the behalf of the government by polling 2,796 adults between Tuesday and Saturday last week.

It has a confidence level of 95 percent and margin of error of 2 percent.