Press release 29.3.2005

Consumers' confidence in the economy stronger than a year ago

In March, consumers' confidence in the economy remained more or less unchanged from the previous month. The consumer confidence indicator stood at 16.4, having been 16.8 in February. However, the confidence indicator stood clearly above its long-term average and was nearly four points higher than at the corresponding time last year. The year-on-year rise of the indicator is mainly due to lessened pessimism in expectations concerning unemployment. Compared to the previous month, the only one of the four components of the confidence indicator that improved in March was that relating to views concerning Finland's economy, while the rest of the components showed slight negative changes. The data are based on Statistics Finland's Consumer Survey for which 1,630 persons resident in Finland were interviewed between 1 and 17 March.

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

March 2005 balance figure February 2005 balance figure March 2004 balance figure Average 10/95-3/05
Consumer confidence indicator 16.4 16.8 12.8 13.5
Own economic situation in 12 months' time 12.0 13.9 13.1 9.0
Household's saving possibilities in the next 12 months 46.2 47.3 45.5 31.1
General economic situation in Finland in 12 months' time 8.9 6.3 7.2 7.5
Unemployment in 12 months' time -1.8 -0.3 -14.5 6.6
Inflation in 12 months' time, % 2.1 1.9 1.6 1.9
Personal threat of unemployment at present 2.7 4.2 1.9 ..
Financial situation of household at present 31.3 31.8 29.6 24.2
Favourable time to make major purchases at present 26.6 30.1 27.7 20.4
Favourable time to save at present 14.2 14.7 12.5 5.0
Favourable time to raise a loan at present 35.7 34.1 30.2 22.3
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 March, 33 per cent of consumers believed that Finland's economic situation would improve in the coming twelve months, while 15 per cent of them thought the country's economy would deteriorate. In February, the respective proportions were 30 and 17 per cent. In all, 31 per cent of consumers believed in March that their own economy would improve and only 10 per cent of them feared it would worsen over the year.

Altogether 32 per cent of consumers thought in March that unemployment would increase over the year and almost as many, or 30 per cent of them believed it would decrease. Twelve months earlier the respective proportions were 46 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 equally many of them also thought it had lessened. Consumers predicted that consumer prices would go up by 2.1 per cent over the next 12 months.

In March, 77 per cent of consumers thought the time was favourable for raising a loan, and 16 per cent of households were planning to do so in the next 12 months. Saving was considered worthwhile by 61 per cent of consumers in March. Sixty-five per cent of households had been able to lay aside some money and 78 per cent believed they would be able to do so during the next 12 months.

In March, 48 per cent of consumers thought the time was favourable for buying durable goods. Households had abundant intentions to invest in home repairs and furnishings and purchase entertainment electronics. Nineteen per cent of households were either fairly or very certain to buy a car and eight per cent a dwelling within the next 12 months.

Consumer confidence indicator 10/1995-3/2005

Consumers' expectations concerning their own and Finland's economy in 12 months' time 10/1995-3/2005

Consumer confidence indicator in EU Member States, February 2005
Deviation of indicator from country average 10/1995-2/2005*

*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, February 2005. http://europa.eu.int/comm/economy_finance/indicators/businessandconsumersurveys_en.htm

Source: Consumer Survey 2005, March. Statistics Finland

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