Taipei, May 27 (CNA) Taiwan's consumer confidence weakened slightly in May as sentiment turned cautious about the local stock market after a recent strong performance in the AI era, according to a survey released by National Central University (NCU) on Wednesday.
The May consumer confidence index (CCI) fell 0.39 points from a month earlier to 62.08 as five of the six factors in the CCI moved lower with the subindex on the stock market suffering the steepest decline.
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.
In May, the subindex for the stock market fell 1.03 from a month earlier to 22.06, the lowest since January 2023, when the subindex stood at 20.8.
Speaking with reporters, Dachrahn Wu (吳大任), director of the NCU Research Center for Taiwan Economic Development, said the fall in the subindex largely reflected fears over a major technical pullback in share prices after the recent robust rally.
Since the beginning of this year, the Taiex, the Taiwan Stock Exchange's benchmark index has soared more than 52 percent, closing at a new high of 44,256.80 Wednesday amid optimism over AI development.
The weakening subindex does not mean investors are downbeat about the stock market outlook in the longer term, Wu said.
The economist said the skyrocketing stock market has offset concerns about military conflict in the Middle East, but potential negative impacts including geopolitical tensions remain in place.
In addition, investors should remain alert as to how the U.S. economy evolves and the policy decisions the Federal Reserve makes, which could affect Taiwan's economy, he added.
As for the four other factors that moved lower in May, the survey found, the subindexes for durable goods purchases, the domestic economic climate, family finances and employment fell 0.65, 0.41, 0.37 and 0.3, respectively, from a month earlier to 91.68, 79.26, 76.02 and 70.7.
Bucking the downturn, the subindex on consumer prices moved higher by 0.45 from a month earlier to 32.77 in May, according to the survey.
Also in May, the home-buying index compiled by NCU and Taiwan Realty fell 0.72 points month-on-month to 88.51, the lowest in nearly six years.
Many potential home buyers put their purchasing plans on hold but poured funds into the stock market to tap high-flying share prices for a higher return, Wu said, adding that a booming stock market has failed to boost the home market.
The university's May CCI survey collected 3,346 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.
