Taipei, Sentiment toward Taiwan's economy continued to weaken in June as concern about the outlook for the local job market increase, according to a survey conducted by Cathay Financial Holding Co.
Citing the poll, Cathay Financial, one of the leading financial holding companies in Taiwan, said cautious sentiment toward the job market offset an improving composite index of monitoring indicators for April released by the National Development Council, signaling a "green light," which pointed to steady growth, for the third consecutive month.
In the survey, about 19 percent of respondents agreed the economy improved from six months earlier, while 47.1 percent said the economy had fared worse than six month earlier.
The figures translated into an economic optimism index for the economy of minus 28.1, the lowest level in 17 months, down from minus 26.7 seen in a similar poll conducted in May. It was the fourth consecutive month the index has moved lower.
In addition, the economic optimism index on the economic outlook for the next six months fell from minus 27.8 in May to minus 29.6 in June, the lowest in 30 months, the survey found.
The weakening sentiment toward the local economy came after the optimism index for the local job market now and over the next six months fell from minus 27.9 and minus 31.8 respectively in May to minus 31.1 and minus 35.3 in June, Cathay Financial said.
The minus 31.1 was the lowest level in 10 months, and the minus 35.3 the lowest in 16 months, Cathay Financial added.
Cathay Financial said caution over the job market also pushed down expectations of wage hikes over the next six months with the relevant index falling from minus 2.0 in May to minus 2.1 in June, ending a five month rising streak.
Amid weakening sentiment toward the job market, the index gauging the willingness of consumers to spend on big ticket items fell from minus 0.3 in May to minus 0.7, while the index on willingness to purchase durable goods also dropped from minus 19.9 in May to minus 20.8, Cathay Financial said.
In the June survey, Cathay Financial said, about 75 percent of respondents expected Taiwan's gross domestic product (GDP) to grow at more than 2 percent, up from 69.2 percent in the May poll.
The average GDP growth expected in the June survey was 2.3 percent, indicating the public appear more cautious than the government. In late May, the Directorate General of Budget, Accounting and Statistics (DGBAS) upgraded its growth forecast for Taiwan's 2018 GDP by 0.18 percentage points to 2.60 percent.
According to the survey, about 80 percent of respondents expect the local consumer price index to rise more than 1.1 percent with an average expected increase of 1.30 percent, which was lower than the DGBAS's estimated 1.49 percent rise.
The survey, conducted from June 1-7, collected 16,185 valid questionnaires online from clients of Cathay Life Insurance and Cathay United Bank, which are 100 percent owned by Cathay Financial.
Source: Focus Taiwan News Channel