Consumer confidence impacted by equity volatility

Taipei, Consumer confidence has been undermined by volatility in equity markets at home and abroad with the consumer confidence index (CCI) for February down slightly from a month earlier, National Central University said Tuesday.

The February CCI stood at 87.38 points, down 0.31 from January after the stock market sub-index fell from a month earlier, the university said.

The CCI is made up of six sub-indexes that reflect confidence in consumer prices, employment, family finances, local economic climate, the stock market and possible purchase of durable goods over the next six months.

The survey was conducted from Feb. 15-19, meaning that consumer sentiment was impacted by the plunge suffered by the local equity market, with the weighted index falling 754.48 points or 6.78 percent during the week of Feb. 5-9, after Wall Street suffered heavy losses amid fears of rising interest rates.

As a result, the sub-index for the stock market over the next six months fell 6.10 points from a month earlier to 100.90 in February. It was the only sub-index among the six in the CCI to move lower month-on-month.

Dachrahn Wu (???), director of NCU’s Research Center for Taiwan Economic Development, told the press that the other five sub-indexes in the CCI moved higher in February so the index as a whole fell only slightly in February.

Wu noted that the sub-index for the stock market still stood above the 100 point mark, indicating optimism.

According to NCU, a sub-index score of 0-100 indicates pessimism, while a score of 100-200 shows optimism.

In February, the sub-index for local economic climate rose 1.10 from a moth earlier to 82.85, while the sub-index for family finances also rose 0.95 to 88.15.

Meanwhile, the sub-index for consumer prices, the timing to buy durable goods and employment gained 0.85, 0.80 and 0.50 points, respectively, from a month earlier to reach 53.35, 92.40 and 106.60 in February, NCU said.

In addition to the stock market, the sub-index for employment also points to optimism, the university said.

The survey collected 2,649 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.

Source: Focus Taiwan News Channel