The consumer confidence index (CCI) this month picked up with six constituent gauges all moving upward on the back of a stock rally that saw the TAIEX hold firmly above 11,000 points, a National Central University (NCU) survey released yesterday showed.
The CCI climbed to 87.69 this month, a 1.64 point gain from last month and the highest in 28 months, as stock investment interest soared to the highest level in nearly three years, NCU Research Center for Taiwan Economic Development director Dachrahn Wu (吳大任) said.
“The confidence figure reflects improvement in popular sentiment led by the strong bourse,” Wu told a news conference.
The sub-index on stock investment registered 109.7, the second-highest level in the history of the survey, as foreign and local investors increased holdings in local shares after returning from the New Year holiday, Taiwan Stock Exchange data showed.
Stock trading lent force to the sentiment change, as seen in the average daily turnover of NT$135.4 billion (US$4.64 billion) so far this year, compared with NT$96.7 billion a day last year and NT$68.8 billion in 2016, NCU professor of economics Yau Ruey (姚睿) said.
The TAIEX’s performance is an important measure of market expectations of corporate profitability, Yau said, adding that the extended rallies suggested a rosy view.
International research bodies have forecast that global GDP growth would improve to more than 3 percent this year, while the domestic economy is to grow 2 percent, Yau said.
Despite lingering uncertainty, there appear to be fewer “black swan” incidents (surprises) on the horizon, and their effects are likely to be moderate if realized, Yau said, referring to elections in Italy, Mexico and the US.
The sub-index on household income gained 2.25 points to 87.2, while the gauge on economic outlook rose 2.05 points to 81.75, the survey found.
People demonstrated increased interest in durable goods purchases with the sub-index standing at 91.6, an increase of 1.4 points from last month, it said.
The gauge is often used to measure the housing market, where many domestic buyers and sellers believe it is wise to stay on the sidelines to avoid price corrections.
The sub-index on consumer prices rose to 52.5, a mild 0.45 point increase, suggesting that the public is dissatisfied with tapering purchasing power due to stagnant wages, Taipei Medical University statistics expert Shia Ben-chang (謝邦昌) said.
The situation will hopefully improve after government employees receive a 3 percent pay raise, Shia said, adding that many firms have voiced plans to follow suit.
The survey polled 2,624 adults by telephone from Jan. 19 to Jan. 21. It had a margin of error of 2 percentage points.
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