Consumer confidence in Taiwan lowers for seventh month

Residents in Taiwan are feeling skeptical about future financial prospects as consumer confidence continues to drop for the seventh month in a row, according to a survey released Friday.

Based on a monthly survey by the "National Central University", the consumer confidence index dropped 0.4 to 84.2 points in November from last month, a report from the university's Research Center for Taiwan Economic Development said.

Taiwan consumers continue to show lower expectations for consumer prices, future income, investment and employment opportunities, but the drop was smaller than the previous month.

The index has been falling since May due to lackluster growth in the local economy. The island's gross domestic product (GDP) dropped by 1.01 percent year on year in the third quarter this year - the lowest since the second quarter in 2009, when Taiwan was hit by the global financial crisis.

The index consists of six indicators to reflect what people think of the economy in the coming six months, reflecting expectations of consumer prices, stock market investment, employment, family income, local economic climate and purchase of durable goods.

Five indicators dropped but one increased this month, compared with reduction of all six indicators last month, which showed a slight improvement, the report said.

Among the indicators that dropped this month, the steepest decline was seen with investment potential in the stock market and the smallest drop for family income.

The only indicator that increased was regarding feelings toward the local economic climate in next six months.

A score ranging between 0 and 100 indicates pessimism while scores between 100 and 200 indicate optimism.

Residents remained confident regarding employment prospects and the ability to buy durable goods, with both indicators at 112.2 and 101.55, while the remainder were all below 100.

The survey was conducted between Nov. 19 and Nov. 23 with 2,442 valid questionnaires.

The official assessment of the economic situation, also released on Friday, showed similar trends.

The monthly evaluation of the economic situation in October remained "sluggish" for a fifth consecutive month, according to data from the island's development council. They assess the economy based on indicators including monetary aggregates, stock price, industrial production, non-agricultural employment, custom-cleared exports, imports of machinery and electronic equipment, manufacturing sales and trade.

However, a few indicators have improved slightly, such as the import of machinery and electronic equipment and non-agricultural employment, the council said in a press release.

The island's exports are likely to recover early next year while investment from the IT industry and consumer spending on holidays may contribute to the economic situation, the statement said. Endi