The consumer confidence index weakened to 74.35 last month, down 2.87 points from the previous month, amid concern that firms might turn more conservative about hiring after the Lunar New Year holiday because of the new labor regulations, a survey by National Central University showed yesterday.
The weakness was across the board and came despite improvements in major economic indicators, researchers said, attributing the softness to the new labor rules that require higher overtime pay and more annual leave for new workers.
The sub-index on the job market outlook posted the biggest decline, sliding 4.9 points to 100.9, contrary to the usual practice of firms boosting temporary hiring to meet a surge in demand over the Lunar New Year holiday, the report said.
“High overtime pay would encourage a shift to automation, or the use of computers and machines instead of people to do the work,” Dachrahn Wu (吳大任), director of the university’s Research Center for Taiwan Economic Development, said by telephone.
Large companies have the motivation and finances to carry out the migration and medium-scale firms will seek to become capital intensive, while small companies will fill more positions with family, relatives or friends, Wu said.
“The evolution might not benefit workers as policymakers intended,” he said, adding that many firms have sought to save on overtime costs by increasing part-time staffers or outsourcing.
Against this backdrop, people grew less confident about household income and the economy in the next six months, with the sub-indices losing 1.65 points and 1.5 points to 76.9 and 71.4 respectively, the survey showed.
People also turned gloomier about stock investment on concern over the limited upside for the local bourse with only a modest economic recovery forecast, he said.
The TAIEX yesterday closed down 0.2 percent at 9,428.97 points. The index closed up 0.3 percent on Tuesday last week, its last trading day before the Lunar New Year holiday.
The survey also showed that the sub-index on durable goods consumption dropped 2.95 points to 85 and the sub-index on consumer prices fell 3.4 points to 45.4.
The telephone survey polled 2,424 adults from Jan. 19 to Jan. 21.
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