Taipei, Sept. 23 (CNA) An index measuring optimism about the local economy over the next six months hit its highest in more than two years after a recent slew of economic data pointed to improvements, according to Cathay Financial Holding Co. (國泰金).
Citing a survey conducted from Sept. 1-7, Cathay Financial said that although the local economic composite index of monitoring indicators flashed a fourth consecutive "yellow-blue" light in July, signaling sluggish growth, the government's decision to raise its forecast for national economic growth for 2017 from 2.05 percent to 2.11 percent increased public optimism about the economy.
Sentiment has also been boosted by solid manufacturing activity, with the August purchasing managers index marking the 18th consecutive month of expansion, Cathay Financial said.
In the survey, 26.7 percent of respondents said that the economy will improve over the next six months, while 32.4 percent said it would deteriorate, which translated into an economic optimism index for the next six months of minus 5.7, the highest in 26 months, sharply up from minus 15.5 recorded in August.
Moreover, another index on the current economic situation also rose from minus 14.0 in August to minus 3.2 in September, Cathay Financial said, adding that 28.9 percent of respondents said economic fundamentals improved over the past six months with 32.1 percent saying the situation worsened.
The September survey showed that about 61.2 percent of respondents said they have faith that Taiwan's economy will grow at a pace of more than 1.5 percent in 2017, compared with 60.1 percent who responded in the affirmative in August.
Due to the more upbeat outlook for the economy, an optimism index on the local job market over the next six month rose from minus 29.3 in August to minus 23.7 in September, while an optimism index about the current job market increased from minus 28.0 to minus 23.0, Cathay Financial added.
Amid improving sentiment about the economy, consumers seem to be more willing to spend, Cathay Financial said, with an index measuring willingness to buy durable goods rising from minus 18.6 in August to minus 16.0 in September.
According to the survey, an optimism index on the local equity market rose from minus 15.4 percent in August to minus 12.8 in September, the highest level in three months, while another measuring appetite for risk rose from minus 6.2 to minus 3.6.
Cathay Financial said that equity investors have become more upbeat on expectations of an improving bottom line at listed companies, in particular firms in the Apple Inc. supply chain due to the launch of the latest iPhones.
The survey collected 16,076 valid questionnaires online from clients of Cathay Life Insurance (國泰人壽) and Cathay United Bank (國泰世華), which are 100 percent owned by Cathay Financial.