Consumer confidence improves to 4-month high on eased crude oil prices

Taipei, June 29 (CNA) Consumer confidence in Taiwan reached a four-month high in June due to falling crude oil prices and the United States and Iran signing a memorandum of understanding to end military hostilities on June 17, National Central University (NCU) said Monday.

Citing a survey conducted June 18-21, NCU said the consumer confidence index (CCI) rose 2.97 from a month earlier to 65.05, the highest level since February, when the index stood at 66.58.

All six of the constituent factors in the June CCI moved higher, according to the university.

The CCI measures sentiment over the next six months across six factors: consumer prices, the domestic economic climate, the stock market, durable goods purchases, employment prospects, and family finances.

Dachrahn Wu (吳大任), director of the NCU Research Center for Taiwan Economic Development, said the June CCI returned to about its level before the war in the Middle East broke out at the end of February, helped by a fall in crude oil prices to US$70-plus per barrel that has boosted consumer confidence in prices.

Another key factor was a spike in the subindex for stocks, which rose to 29.9, up 7.89 from a month earlier. The sharp rise was powered by huge gains in the Taiex, the Taiwan Stock Exchange's benchmark index, due to the ongoing AI frenzy.

Wu said that although the Taiex has started to retreat on profit-taking, share prices have still stayed relatively highs, and the booming market has led many consumers to believe Taiwan has a strong economy.

NCU economics professor Yau Ruey (姚睿) said she did not rule out the possibility that the U.S. Federal Reserve will raise rates to take on inflationary pressure, which is expected to affect investors' confidence.

In June, the subindexes for consumer prices, purchases of durable goods and employment also moved higher by 3.06, 1.87, and 1.76, respectively, from a month earlier to 35.83, 93.55, and 72.46, the survey showed.

Meanwhile, the subindexes for family finances and the local economic climate rose 1.68 and 1.61, respectively, from a month earlier to 77.7 and 80.87 in June, the survey indicated.

Also in June, the home-buying index compiled by NCU and Taiwan Realty rose 1.84 points month-on-month to 86.82.

NCU also released the Taiwan energy security index (TESI), which stood at 69.1 in the first quarter, down 1.3 from a quarter earlier but up 8.3 from a year earlier.

Liang Chi-Yuan (梁啟源), a fellow of the NCU Research Center for Taiwan Economic Development, said Taiwan is facing a power shortage, and the government should speed up the restart of nuclear power to fill the gap.

The university's June CCI survey collected 3,341 valid responses from Taiwanese consumers aged 20 and older. It has a 95 percent confidence level with a margin of error of plus or minus 2.0 percentage points.