Press release 27.1.2005

Consumption is regarded as worthwhile in January

Consumers' confidence in the economy weakened somewhat at the turn of the year. In January, the consumer confidence indicator stood at 12.3, having been 14.6 in December. However, confidence in the economy was more or less on level with twelve months earlier. Of the four components of the confidence indicator, views concerning own and Finland's economy and those about saving possibilities weakened slightly in January from the month before. Expectations concerning the development of unemployment remained unchanged. On the other hand, consumers regarded the time very favourable for making major purchases. The data are based on Statistics Finland's Consumer Survey for which 1,573 persons resident in Finland were interviewed between 3 and 19 January.

Consumer views on the economic and financial conditions in Finland in January 2005

January 2005 balance figure December 2004 balance figure January 2004 balance figure Average 10/95-1/05
Consumer confidence indicator 12.3 14.6 11.8 13.5
Own economic situation in 12 months' time 10.9 12.1 12.5 9.0
Household's saving possibilities in the next 12 months 40.2 47.0 42.5 30.8
General economic situation in Finland in 12 months' time 5.1 6.2 8.5 7.5
Unemployment in 12 months' time -6.9 -6.8 -16.3 6.8
Inflation in 12 months' time, % 1.9 1.9 1.6 1.9
Personal threat of unemployment at present 4.8 1.2 .. ..
Financial situation of household at present 28.6 29.8 30.9 24.1
Favourable time to make major purchases at present 34.5 16.9 37.2 20.3
Favourable time to save at present 15.2 14.8 13.7 4.8
Favourable time to raise a loan at present 30.2 29.1 31.5 22.1
The balance figures are obtained by deducting the weighted proportion of negative answers from that of positive answers. The consumer confidence indicator is the average of the balance figures for four questions concerning the next 12 months: own and Finland's economy, unemployment and household's saving possibilities. The balance figures and the confidence indicator can range between -100 and 100. A positive balance figure denotes an optimistic and a negative balance figure a pessimistic view on the economy.

In January, 29 per cent of consumers believed that Finland's economic situation would improve this year, while 18 per cent of them thought the country's economy would deteriorate. In all, 31 per cent of consumers believed in January that their own economy would improve but slightly more than before, or 12 per cent of them feared it would worsen over the year.

Altogether 36 per cent of consumers thought in January that unemployment would increase this year while 24 per cent believed it would decrease. One year ago, the respective proportions were 48 and 20 per cent. Fourteen per cent of employed persons reckoned that their personal threat of unemployment had grown over the past few months but more, or 18 per cent of them thought it had lessened. Consumers predicted that consumer prices would go up by 1.9 per cent this year.

In January, 73 per cent of consumers thought the time was favourable for raising a loan, and 13 per cent of households were planning to do so in the next 12 months. Saving was considered worthwhile by 63 per cent of consumers in January. Sixty-two per cent of households had been able to lay aside some money and 75 per cent believed they would be able to do so during this year.

In January, 53 per cent of consumers thought the time was favourable for buying durable goods. One month earlier 44 per cent of them had thought this. Households had abundant intentions to do home repairs and travel. Nineteen per cent of households were either fairly or very certain to buy a car and seven per cent a dwelling within the next 12 months.

Consumer confidence indicator 10/1995-1/2005

Consumers' expectations concerning their own and Finland's economy in 12 months' time 10/1995-1/2005

Consumer confidence indicator in EU Member States, December 2004
Deviation of indicator from country average 10/1995-12/2004*

*Calculated from seasonally adjusted series. Malta does not conduct a consumer survey. Data for France are missing due to break in time series. Averages for a shorter time period: Luxembourg 1/2002 -, Cyprus, Lithuania and Poland: 1/2001 -, Slovakia: 4/1999 -.
Source: European Commission, DG ECFIN, Business and Consumer Survey Results, December 2004. http://europa.eu.int/comm/economy_finance/indicators/businessandconsumersurveys_en.htm

Source: Consumer Survey 2005, January. Statistics Finland

Inquiries: Mr Pertti Kangassalo +358 9 1734 3598, kuluttaja.barometri@stat.fi