The nation’s consumer confidence rose modestly to 83.34 points this month, an increase of 1.14 points from a month earlier, as a rally in local shares bolstered risk appetite and the wealth effect, a National Central University survey showed on Friday.
“The gauge of stock investment reported the most evident pickup at 3.1 points,” as the TAIEX held firm above 10,700 points this month, easing concerns over potential corrections, said Dachrahn Wu (吳大任), director of the university’s Research Center for Taiwan Economic Development.
In addition, the government’s announcement last month that it would raise wages has prompted some companies to follow suit, which also helped lift consumer confidence, Wu said.
The investment sub-index rose to 98.5 this month, a big leap from 66.5 in January, underpinning the advance in consumer confidence this year, Wu said.
On Friday, the TAIEX closed down 0.24 percent at 10,709.11. The benchmark index has risen 15.73 percent so far this year.
The survey found that consumers have become more optimistic about economic conditions, with the sub-index on the economic outlook rising 1.6 points to 77.45, while rallies in local shares have had a wealth effect, raising the sub-index on household incomes by 1.1 points to 82.6.
Consumer prices are expected to climb higher as the sub-index on inflation grew 0.95 points to 49.55, according to the survey.
The survey also indicated that people are generally upbeat about the job market, sending the sub-index on employment outlook up to 103.8.
However, the sub-index on purchases of durable goods was the sole indicator to show a negative cyclical movement, shedding a marginal 0.1 point to 88.15, the survey showed.
That suggests conservative sentiment about the domestic property market, as potential buyers’ expectation of a drop in prices lingers, although the worst is likely over, Wu said.
The property market has stabilized after a long soft landing, central bank Governor Perng Fai-nan (彭淮南) told the legislature’s Finance Committee on Wednesday.
Separately, business sentiment in the local manufacturing sector has weakened, with an index gauging the mood of manufacturers falling last month, ending a three-month rising streak, the Taiwan Institute of Economic Research (台灣經濟研究院) said on Friday.
The manufacturing composite index fell 0.50 points from a month earlier to 101.72, breaking three consecutive months of rising confidence, which the institute said reflects moderation in export order growth this month due to a relatively high comparison base.
However, the sub-index for the construction industry bucked the downturn, rising 0.17 points from a month earlier to 95.81, as property developers increased the pace of project completion by the end of this year to boost buying interest, the institute said.
The composite index for the service sector also fell 2.06 points from a month earlier to 93.55, as consumption of select items, such as beverages and ice products, dropped in the face of cooler temperatures, the institute said.
However, business sentiment among local securities businesses appeared more optimistic, as the stock market continued to boom, it said.
Additional reporting by CNA
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