Consumer confidence in Taiwan hits 54-month high

Taipei, Sept. 27 (CNA) Taiwan's consumer confidence index (CCI) reached its highest level since March 2020 in the latest research as it grew for the fifth consecutive month.

Citing a survey conducted from Sept. 18 to 21, the National Central University (NCU) said Friday that the local CCI rose 0.09 points from a month earlier to 77.84, the highest since March 2020, when the index stood at 78.51 .

The CCI gauges people's confidence in consumer prices, the local economic climate, the stock market, the likelihood of purchasing durable goods, employment prospects, and family finances over the next six months, with the index ranging from 0-200.

According to NCU's press statement, the public's confidence has risen in all sub-indexes except for the stock market, which dipped to 57.38, down 1.64 points from the previous month, while the consumer price sub-index rose the most, up 0.61 points to 43.49.

The Taiex, the Taiwan Stock Exchange's weighted index, closed at 22,822 on Friday, up 452 points, or 2.02 percent, over the past month from Aug. 28, after rebounding from a monthly low of 21,031 on Sept. 11.

The NCU's results differ from a survey released about a week ago by Cathay Financial, the largest financial holding firm in Taiwan, in terms of assets.

According to Cathay Financial's survey, which was conducted in the first week of September, the economic optimism index over the next six months fell to minus 6 from minus 3.2 in August, the lowest level since November 2023, when it stood at minus 9.1.

Asked to comment on the latest survey, NCU Economic Research Center Director Dachrahn Wu (吳大任) said overall confidence was mainly driven by stable demand in the domestic market as well as wage hikes in some industries facing labor shortages.

Earlier this month, the Minimum Wage Deliberation Committee decided to raise the monthly wage floor by 4.08 percent, or NT$1,120 (US$35.5), to NT$28,590, and increase the minimum hourly wage from NT$183 to NT$190.

The decisions, both effective from Jan. 1, 2025, and pending Cabinet review, are expected to benefit 2.57 million workers, including about 368,000 migrant workers.

Emphasizing Taiwan's reliance on exporting to the United States, however, the NCU professor noted that the Federal Reserve's decision to cut interest rates by half a percentage point on Sept. 18 signaled a conservative outlook for the American market.

Meanwhile, the durable goods sub-index remained the only one standing above 100 as it rose to 109.74, up 0.41 points from August.

Index scores of 100 or above indicate optimism, while scores below 100 indicate pessimism.

Mirrored by the 0.4 point monthly increase in the real estate purchase index (106.73), which was compiled by NCU along with Taiwan Realty Estate Co., the sub-index rose as Taiwan's central bank sought to curb speculation in the housing market.

At a meeting on Sept. 19, the central bank decided to raise the required reserve ratio -- the proportion of deposits regulators require banks to hold in reserve and not lend -- by 25 basis points to rein in high house prices, which is widely regarded as one of the most significant moves by the banking authority.

Chou He-ming (周鶴鳴), first vice president for Taiwan Realty Estate Co., said the measure has officially put an end to the buoyed prices of domestic houses, making people who want to purchase a residence the main buyers active in the housing market.

The university's CCI survey in September collected 3,142 valid questionnaires from consumers in Taiwan 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.