Consumer confidence remained virtually flat this month, but people showed more interest in buying real estate and have regained modest confidence in stock investment, a National Central University survey showed yesterday.
The consumer confidence index rose 0.66 points from a month earlier to 69.43, as COVID-19 cases increased abroad, limiting a recovery in domestic demand, the survey found.
“The increase is statistically insignificant so a neutral reading is better advised,” said Dachrahn Wu (吳大任), director of the university’s Research Center for Taiwan Economic Development, which conducts the survey.
However, the sub-index on purchases of durable goods reported a meaningful increase of 4.2 points to 96.1, suggesting that people were more confident about buying real estate, Wu said.
Rallies on the local bourse should have benefited investors, so some extra funds might flow to the property market, Wu said, adding that real estate would receive an additional boost from capital repatriation.
Property price and housing transaction data lent support to his observations.
Confidence scores of more than 100 suggest optimism, and values below that indicate pessimism.
The sub-index on stock investment increased a slight 2.5 points to 44.1, meaning that the public is afraid of joining the market, although the TAIEX is approaching the record high of 12,682 points recorded on Feb. 12, 1990, Wu said.
“The fact that most people are conservative and cautious is healthy for the market,” Wu said, adding that it reduces the risk of overheating.
Wu voiced concern over the job market outlook as the sub-index shed 2.25 points to 73.3, signifying that the jobless rate might have climbed this month after an expected dip last month.
The fast-growing spread of COVID-19 in many parts of the world is bound to curtail Taiwan’s exports and hiring activity among manufacturers, Wu said.
The manufacturing industry is likely to replace service-oriented sectors in bearing the brunt of the virus shock, he added.
The number of furloughed workers rebounded last week as non-tech companies reported poor order visibility.
Unease about the nation’s economic outlook grew slightly, with the sub-index slipping 0.25 points to 82.65.
The sub-index on consumer prices shrank 0.05 points to 38.85, the survey said.
The survey polled 2,850 adults by telephone between July 18 and July 20, and had a margin of error of 2 percentage points.
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