TAIPEI – Taiwan's consumer confidence plummeted to its lowest point in eight months in January, weighed down by anxieties over the potential fallout from then-President-elect 's trade policies, according to a survey released by National Central University (NCU).
The Consumer Confidence Index (CCI) dropped 2.07 points from the previous month to 72.54, the weakest reading since May of last year, when it registered 72.20. The CCI tracks consumer sentiment across six key areas: consumer prices, the domestic economic climate, the stock market, the propensity to buy durable goods, employment prospects, and family finances over the next six months.
All six sub-indices registered declines in January. Dachrahn Wu, director of NCU's Research Center for Taiwan Economic Development, attributed the across-the-board weakening to rising inflationary pressures and apprehension regarding potential trade tariffs, particularly concerning semiconductors. The survey was conducted between January 18 and 21, just before the individual took office.
The sharpest decline was observed in the sub-index measuring consumer prices, which fell 3.98 points to 37.25. Wu explained that consumers were already feeling the pinch of rising prices in anticipation of the Lunar New Year holiday, a period when vendors typically raise prices due to increased demand.
The stock market sub-index also saw a significant drop of 2.46 points, landing at 50.53. Wu noted that investors were likely factoring in the potential impact of tariff threats on the vital semiconductor industry.
Other sub-indices followed suit, with employment prospects dipping 2.02 points to 75.61, family finances falling 1.88 points to 82.54, the domestic economic climate decreasing 1.86 points to 86.84, and the willingness to purchase durable goods slipping slightly by 0.17 points to 102.49.
A sub-index score below 100 on the NCU survey indicates pessimism, while a score above 100 reflects optimism. Notably, the only sub-index remaining in positive territory was the willingness to purchase durable goods.
The NCU report highlighted the potential impact of the then-incoming administration's trade policies, particularly given Taiwan's export-oriented economy and reliance on the US market. Recent actions, such as imposing tariffs on goods from various countries, have reinforced these concerns, creating ripples through Asian financial markets. Wu suggested that market sentiment is likely to remain subdued in the coming months.
A separate survey conducted by NCU in conjunction with Taiwan Realty showed a slight 0.13-point increase in the home-buying index, reaching 99.97.
The NCU CCI survey polled 3,032 Taiwanese consumers aged 20 and above, with a confidence level of 95 percent and a margin of error of plus or minus 2 percentage points.
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