HIGH inflation, a weak stock market and concerns over tightening measures put a dent in the confidence of Shanghai's consumers who were pessimistic in the third quarter this year, the first time their confidence has dipped since the first quarter of 2009, according to a survey yesterday.

The consumer confidence index dropped to 99 in July to September, down 7.7 points from the same period a year ago, the Shanghai University of Finance and Economics said in a report yesterday, quoting a quarterly index on consumer tendency in the city.

A reading above 100 signals consumers are optimistic about the economy while one below indicates pessimism.

Xu Guoxiang, the research program leader and a professor at the university's Applied Statistics Research Center, cited pressure of high inflation, rising raw material costs and a weak stock market as the reasons for the negative consumer sentiment.

Last month, a survey by the Shanghai Statistics Bureau showed local residents were most worried about the prices of foodstuffs, including staples, meat and edible oil.

"Policymakers should optimize the city's economic structure and shift to the service industry and at the same time boost domestic demand, rather than rely on the property sector," Xu suggested.

Separately, an index tracking consumers' willingness to buy property in the third quarter fell 3.5 points from three months earlier to 25.1 due to home buying restrictions and a property tax at both national and regional levels.

An investor confidence index fell 3.34 points in the third quarter from the second quarter to 110.02. But the reading was seen as positive.

Source:shanghaidaily