Consumer confidence weakens as faith in job market drops
Consumer confidence weakened in August as faith in the local job market plunged to its lowest level in more than eight years, a survey released by National Central University (NCU) showed Tuesday.
Citing the survey, the university’s Research Center for Taiwan Economic Development said the consumer confidence index fell 1.74 points from a month earlier to 79.74 in August, with the sub-index on confidence in employment falling to 94.0, the lowest since December 2010, when it stood at 90.10.
The CCI consists of six factors that reflect public confidence in employment, family finances, consumer prices, the local economic climate, the stock market and the likelihood of purchasing durable goods over the next six months.
The sub-index on confidence in employment for August fell 3.6 from a month earlier, the steepest decline among the six factors, the survey found.
Dachrahn Wu (吳大任), director of the research center, said the decline in employment confidence came at a time when the local economy showed signs of slowing down and the number of furloughed workers spiked in the month.
Taiwan’s gross domestic product is forecast to grow 2.46 percent in 2019, moderating from a 2.63 percent increase in 2018, although the Directorate General of Budget, Accounting and Statistics (DGBAS) has upgraded its estimate for growth in 2019 by 0.27 percentage points from the previous prediction.
The number of employees on unpaid leave in Taiwan as of Aug. 15 stood at 2,012, up 1,341 from 671 at the end of July, government statistics showed. The latest number was the highest this year.
Wu said the more downbeat mood about the local job market also reflected the increased number of first time jobseekers during the graduation season, which has sent the local jobless rate higher. In July, the local unemployment rate stood at 3.82 percent, up 0.09 percentage points from June.
In addition to employment, the other five sub-indexes moved lower in August to push the CCI down further, the survey showed.
The sub-indexes on the local economic climate, family finances, the likelihood of purchasing durable goods, the stock market, and consumer prices fell 0.65, 0.8, 0.8, 2.2 and 2.35, respectively, from a month earlier to 86.25, 90.35, 91.65, 65.2 and 51.0 in August, according to the survey.
A sub-index score of 0 to 100 indicates pessimism, while a score of 100-200 indicates optimism.
In other words, the university said, survey respondents were downbeat about all six factors that make up the index over the next six months in August.
Wu said although Taiwan’s economy has been affected by weakening global demand amid trade friction between the United States and China, an increase in domestic demand with more Taiwanese firms pledging to invest at home has helped to stabilize economic growth this year.
The survey, conducted from Aug. 19-23, collected 2,779 valid questionnaires from local consumers aged 20 and over. It had a confidence level of 95 percent and a margin of error of plus or minus 2.0 percentage points.