Consumer confidence plunges

NO DURABLES: Rising prices for technology components are pushing up prices for smartphones and laptops, while home purchases are softening, an analyst said

• By Crystal Hsu / Staff reporter

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Consumer confidence fell this month, with willingness to buy durable goods plunging to its lowest since October 2009, the National Central University said yesterday.

The consumer confidence index fell 2.5 points to 66.27 from last month, a survey conducted by the university’s Research Center for Taiwan Economic Development showed.

The subindex measuring willingness to buy durable goods over the next six months tumbled 10.81 points to 82.97 as rising electronics prices and a sluggish housing market dampened household spending plans, center executive director Dachrahn Wu (吳大任) said.

“Rising prices for memory chips and other components are pushing up prices for smartphones and laptops, while weakness in the property market is discouraging home purchases,” Wu said.

The decline highlights a growing disconnect between Taiwan’s export-driven growth and household spending sentiment.

The economy is benefiting from surging demand for artificial intelligence (AI) hardware, with GDP projected to grow more than 11 percent this year, but a surge in AI-related demand has pushed up component costs, Wu said.

Apple Inc and Samsung Electronics Co have raised prices for their latest devices, prompting some consumers to delay replacing older models, he said.

The pressure might persist as new production capacity will take two to three years to come online, limiting the scope for near-term relief in electronics prices, he said.

Housing sentiment also weakened, with a separate property-buying index compiled by Taiwan Realty Co (台灣房屋) that measured whether it is a good time to buy real estate falling 8.2 points to 90.64, despite the central bank’s decision last month to ease some restrictions on property lending.

In addition, rising stock prices have drawn funds that might otherwise have gone toward property purchases, while some prospective buyers are struggling to secure mortgage loans, Wu said.

Young people are also increasingly looking to save for home purchases through stock investments before entering the property market, he added.

The survey showed three of the six subindices edged higher this month, reflecting improved sentiment toward job opportunities, consumer prices and stock investment.

However, the gains were outweighed by declines in household finances, the domestic economic outlook and willingness to buy durable goods, Wu said.

Despite double-digit economic growth, the benefits have been concentrated in technology-related sectors rather than spread broadly across the economy, while inflationary pressure continues to weigh on consumer sentiment, he said.