Oct. consumer confidence hits over 2-year low
By Camaron Kao ,The China Post
October 30, 2012, 12:13 am TWN
The National Central University (中央大學) Research Center for Taiwan Economic Development yesterday announced that the consumer confidence index in October declined by 1.62 compared to that of last month, reaching its deepest low since February 2010.
The total index score was 72.73, which indicates overall pessimism, said the center's director, Wu Dachrahn (吳大任).
Wu said that of the six sub-indexes, employment confidence for the next six months rose, and the likelihood for purchasing durable goods in the next six months remained unchanged. The other four sub-indices — the likelihood for investing in the stock market, total family income for the next six months, confidence in the local economic condition for the next six months and predictions for inflation in the next six months — all declined.
The likelihood for investing in the stock market decreased most significantly in October. Taiwan Research Institute (台灣綜合研究院) Division Director Day Jaw-yang (戴肇洋) said that declining sentiment may be caused by uncertainty surrounding the future of the National Health Insurance supplementary premium policy, which, though the government is yet to produce a final version, is expected to be implemented on Jan. 1, 2013.
Whether the government will pour money from the national security fund into the stock market to restore the market's trade volume and prices remained in doubt.
Day, however, added that the U.S. presidential election may have a positive impact on that country's stock market, in turn helping the Taiwanese stock market.
Taiwanese companies started issuing stock dividends of between approximately NT$400 billion to NT$500 billion in August. If this money remains in the stock market, it will create momentum for market growth.
As for job market prospects, National Central University Professor San Gee (單驥) said that increasing domestic demand from the service, hotel and tourism industries is set to provide jobs, thereby keeping the unemployment rate low.
People's confidence about the local economic condition in the next six months declined by 1.6, reaching its lowest point since April 2010. Wu, however, remained optimistic that consumer confidence might increase in November. The monitoring signals changed from blue to yellow-blue in September, Wu said, suggesting a better economic condition. In addition, export figures in September also returned to positive.
Commenting on the global economic condition, Wu said that he expected the U.S. to recover and mainland China to develop stably. The unemployment rate in the U.S. is declining, and the U.S. housing market is also recovering.
In terms of the likelihood for people to buy durable goods, Taiwan Insurance Guaranty Fund (保險安定基金) Chairman Chu Yun-peng (朱雲鵬) said that the effect of quantitative easing policy, which is expected to increase demand for houses, is offset by the luxury tax, the recent implementation of an actual price registration for real estate and an excess supply of homes of 231 to 264 square meters.
Chu said that after the government obtains further data about actual transaction prices, local governments may adjust the assessed land value accordingly. This will increase tax paid by the property owners.