Consumer confidence slipped this month as uncertainty over US trade policy continued to weigh on household sentiment, highlighting persistent caution despite strong economic growth, a National Central University survey showed.
The consumer confidence index (CCI) declined 0.35 points from October to 64.3, leaving the gauge broadly flat, the university’s Research Center for Taiwan Economic Development said.
Consumer sentiment outlook remains highly sensitive to developments in US tariff policy, which are expected to become clearer in the first quarter of next year, center director Dachrahn Wu (吳大任) said.
Photo: CNA
“Once US tariff policies become clear, the direction of consumer confidence will be either very positive or very negative,” Wu said, underscoring the risk of heightened volatility in sentiment.
Of the six sub-indicators measured in the survey, perceptions of price levels and household financial conditions improved, while confidence in domestic economic prospects, job opportunities, stock investment and purchases of durable goods declined.
While GDP growth is expected to surpass 7 percent this year on the back of robust exports, most households have seen limited tangible benefits, Wu said.
Total employment stands at about 11 million, of which about 60 percent are in the service sector, which has limited exposure to export growth, while the semiconductor industry — the main driver of the nation’s growth — employs just more than 300,000 people, Wu added.
Taiwanese firms are expected to expand operations in the US to secure favorable tax terms, a move that could shift high-paying jobs overseas and potentially crowd out private investment domestically, Wu said.
In related developments, the National Development Council (NDC) reported that Taiwan’s economy maintained solid expansion momentum last month, buoyed by demand linked to artificial intelligence (AI) hardware.
The government’s business climate monitoring score rose two points from October to 37, remaining in the yellow-red zone for three consecutive months and just one point below a boom.
High-performance computing and cloud demand have fueled strong chip orders, while seasonal factors lifted sales in the wholesale, retail, food and service sectors, NDC Department of Economic Development Director Chen Mei-chu (陳美菊) said.
However, gains remained uneven, with AI-related sectors leading growth in exports, production and employment, while traditional industries continued to face headwinds, Chen said.
The index of leading indicators, which aims to predict the economy’s direction in the following six months, rose 0.48 percent from a month earlier to 101.70. Four components — export orders, manufacturing business sentiment, stock prices and money supply — picked up.
The coincident indicators index, which reflects current economic conditions, climbed 0.53 percent to 105.86 on stronger exports, wholesale and retail sales, and machinery imports, signaling that growth momentum is broadening.
Chen said Taiwan faces opportunities and challenges, as developments in US tariffs next month could weigh on short-term sentiment, even as strong tech orders and a TAIEX rally support confidence.
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