Consumer confidence weakens, hurt by inflation

Consumer confidence weakened for a fourth consecutive month in November because of rising inflationary pressures, according to National Central University (NCU).

The consumer confidence index (CCI), compiled by NCU based on a survey conducted from Nov. 18 to 21, fell 0.93 points in November from a month earlier to 73.33, its lowest level since January 2021, when it hit 71.98.

The CCI gauges the level of confidence people have in the prospects for employment, family finances, consumer prices, the local economic climate, and the stock market, and the likelihood of purchasing durable goods over the coming six months.

Among the six factors making up the CCI, the sub-index on family finances fell the most in November, tumbling 5.15 points from a month earlier to 81.95, its lowest level since October 2020 when it was at 81.65.

The sub-index on consumer prices declined for a fourth consecutive month in November, sliding 3.35 points from a month earlier to 35.45, the survey found.

Dachrahn Wu (???), director of NCU's Research Center for Taiwan Economic Development, said mounting inflationary pressures affected confidence because consumers were having to cope with higher prices and increases in household spending.

In October, the consumer price index (CPI) rose 2.58 percent from a year earlier, with the prices of fruit and vegetables rising 17.67 percent and 16.16 percent due to bad weather and fuel soaring 28.97 percent following a spike in international crude oil prices.

It was the third consecutive month the CPI rose by more than 2 percent, despite the insistence by Taiwan's government and central bank that the higher consumer prices would be short-lived.

In the November survey, 38.1 percent of respondents expected consumer prices to rise sharply over the next six months, up from 34.6 percent in a similar poll in October, while only 4.3 percent expected prices to stay stable, compared with 5.5 percent a month earlier.

The sub-index on the local economic climate fell 2.2 from a month earlier to 86.7 in November.

Bucking the downturn, the sub-indexes on the likelihood of purchasing durable goods, the stock market and employment rose 3.7, 1.4 and 0.05, respectively, from a month earlier to 120.50, 48.8 and 66.6 in November, according to the survey.

A sub-index score of 0-100 indicates pessimism, while a score of 100-200 shows optimism, NCU said, noting that optimism was seen in November only in the sub-index for the likelihood of purchasing durable goods over the next six months.

The NCU survey in November collected 2,866 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