Thu, Apr 28, 2022 page12

• Consumer confidence at 10-month low, survey finds

  CONCERN: The business climate monitor turned ‘green’ from ‘yellow-red,’ after the economy shed further momentum, but was still on a stable course of growth

  • By Crystal Hsu / Staff reporter
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  Consumer confidence this month softened to a 10-month low and might drop further next month as domestic COVID-19 infections spike and stock routs deepen, a survey released yesterday by National Central University found.

  According to the survey — which collected 2,776 valid responses from adults by telephone last week — the consumer confidence index lost 0.47 points to 71.77, the third consecutive month of declines and the lowest level since July last year, mainly weighed down by poor investment sentiment.

  With foreign and domestic institutional players cutting holdings of local shares, taking their cue from an ongoing correction in global tech stocks, the subindex on stock investment fell 4.3 points, consistent with slumps on the stock market, said Dachrahn Wu (吳大任), director of the university’s Research Center for Taiwan Economic Development, which conducted the survey.

  

  People cross a street in Taipei’s Neihu Technology Park yesterday.

  Photo: CNA

  This survey likely underestimated sentiment shifts linked to a rise in infections of the Omicron variant of SARS-CoV-2 in Taiwan and rolling lockdowns in China’s major cities, Wu said.

  Daily new case tallies averaged 2,000 cases during the surveyed period, but are soon expected to surpass 10,000 per day, he said, predicting that exports and local demand would take a hit.

  “The chance of stagflation looms larger ahead,” Wu said.

  People have become less eager to buy durable goods, especially real estate, as well as losing some confidence in GDP growth forecasts for this year, the results showed.

  However, people have a more positive outlook on the job market and anticipate a mild improvement in incomes.

  The subindex on consumer prices changed little after the government put off increasing electricity prices, but the central bank is expected to raise interest rates in June to narrow differences between Taiwan and the rest of the world, Wu said.

  Separately, the government’s business climate monitor last month turned “green” from “yellow-red” the previous month, indicating that the economy shed further momentum, but was still on a stable course of growth amid mounting uncertainty, the National Development Council (NDC) said yesterday.

  The council uses a five-color system to depict the nation’s economic state, with “green” signifying steady growth, “red” suggesting a boom and “blue” indicating a recession. Dual colors indicate a shift to a stronger or weaker state.

  “Economic challenges loom larger this quarter as the conflict between Russia and Ukraine weighs on corporate confidence,” NDC research director Wu Ming-huei (吳明蕙) said, adding that Western sanctions imposed against Russia over its invasion of Ukraine have disrupted energy and raw material supplies, and would affect the outlook of global GDP growth.

  The gauge for industrial production last month fell 2 points, as component shortages continued to hound automakers and chemical product suppliers conducted annual maintenance inspections, Wu said.

  There is no need to worry, as the retreat was not triggered by the demand side, she said.

  The index of leading indicators, used to project the economic landscape in the coming six months, shrank 0.4 percent from a month earlier, as almost all constituents showed negative cyclical movements, the NDC said.

  It is too early to guess the effects of lockdowns in Chinese cities, but demand for 5G and new technology applications remains resilient, Wu said, citing guidance from major Taiwanese semiconductor firms.
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