Public confidence in the economy and stock market remained weak this month, a survey by Cathay Financial Holding Co (國泰金控) showed yesterday.
The poll showed that 55.9 percent of respondents expect the economy to deteriorate in the coming six months, while only 14 percent hold an optimistic view and 6.1 percent had no opinion.
The prevailing pessimism reflects major economic data suggesting that the economy likely contracted last quarter, Cathay Financial economic research department assistant manager Achilles Chen (陳欽奇) said.
However, the economy could pick up this quarter, with the advent of the high season for technology products and retail sales at home and in the West.
“It is too early to tell if the worst is over based on the results of the survey, although seasonal trends may lend support to the assumption,” Chen said by telephone.
The Directorate-General of Budget, Accounting and Statistics is due to unveil third-quarter GDP figures next week and worse-than-expected results could drag confidence lower next month, Chen said.
The Chung-Hua Institution for Economic Research (中華經濟研究院) said last week the economy might have contracted 2.11 percent during the July-to-September period in light of the double-digit slump in exports.
Given a dim outlook, 53.2 percent of respondents said they expect job-hunting to be more difficult in the coming six months, while 6.1 percent said it would become easier, the survey showed.
The increasing number of furloughed employees and layoffs contributed to the grim outlook, Chen said.
However, a majority of respondents, or 52.1 percent, said they would keep their securities positions unchanged, while 34.7 percent plan to cut holdings and 13.2 would increase their stakes, the poll showed.
The decision last week by the National Stabilization Fund to continue shoring up local shares until after the Jan. 16 elections should lend support to the TAIEX and general risk appetite, Chen said.
Meanwhile, 43 percent of the respondents said they would cut purchases of durable goods, much higher than the 14.2 percent who said they would increase their budget, according to the survey.
Furthermore, 33 percent plan to reduce consumption of big-ticket items, while 46.8 percent would maintain their spending pattern, the survey showed.
The findings are unfavorable to private consumption and department stores are offering deep discounts to spur demand, Chen said.
An overwhelming number of respondents believe it is unwise to buy or sell properties at 76.7 percent and 58.4 percent respectively, suggesting an extended soft patch for the housing market, the survey showed.
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