Press release 27.5.2005

Consumers have saving possibilities - confidence in Finland's economy weakening

Consumers' confidence in the economy was nearly unchanged in May compared with the previous month and one year ago. The consumer confidence indicator stood at 14.0, having been 13.5 in April and one year ago. The confidence indicator was also on the level of its long-term average. Compared with the previous month, of the four components of the confidence indicator belief in one's own economy remained strong in May and unchanged from April and views on saving possibilities rose to record level. In contrast, expectations of Finland's economy and development of unemployment weakened further among consumers. The data are based on Statistics Finland's Consumer Survey for which 1,513 persons resident in Finland were interviewed between 2 and 19 May.

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

May 2005 balance figure April 2005 balance figure May 2004 balance figure Average 10/95-5/05
Consumer confidence indicator 14.0 13.5 13.5 13.5
Own economic situation in 12 months' time 11.6 11.9 10.7 9.1
Household's saving possibilities in the next 12 months 50.7 40.2 47.0 31.3
General economic situation in Finland in 12 months' time 0.8 4.4 5.7 7.4
Unemployment in 12 months' time -6.9 -2.5 -9.5 6.4
Inflation in 12 months' time, % 2.2 2.1 2.0 1.9
Personal threat of unemployment at present 4.7 6.0 3.4 ..
Financial situation of household at present 33.6 31.4 30.7 24.4
Favourable time to make major purchases at present 26.4 26.4 27.2 20.5
Favourable time to save at present 14.3 17.9 15.0 5.1
Favourable time to raise a loan at present 35.8 33.0 29.6 22.5
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 May, 26 per cent of consumers believed that Finland's economic situation would improve in the coming twelve months, while 23 per cent of them thought the country's economy would deteriorate. The respective proportions were 27 and 18 per cent in April and 30 and 19 per cent one year ago. In all, 30 per cent of consumers still believed in May that their own economy would improve and only 10 per cent of them feared it would worsen over the year.

Altogether 38 per cent of consumers thought in May that unemployment would increase over the year and 27 per cent of them believed it would decrease. In April the corresponding proportions were 33 and 29 per cent. Eleven per cent of employed persons reckoned that their personal threat of unemployment had grown over the past few months but more of them, i.e. 15 per cent thought it had lessened. Consumers predicted that consumer prices would go up by 2.2 per cent over the next 12 months.

In May, 77 per cent of consumers thought the time was favourable for raising a loan, and 14 per cent of households were planning to do so in the next 12 months. Saving was considered worthwhile by 62 per cent of consumers in May. More than ever before, or 67 per cent of households had been able to lay aside some money and as many as 82 per cent believed they would be able to do so during the next 12 months.

In May, 47 per cent of consumers thought the time was favourable for buying durable goods. The corresponding proportion was 51 per cent one year previously. Households still had abundant intentions to invest in home repairs, to purchase leisure equipment and to travel. Eighteen per cent of households were either fairly or very certain to buy a car and nine per cent a dwelling within the next 12 months.

Data about the frequency of home appliances in households are also available from Statistics Finland.
The most recent data were collected in connection with the May interviews for the Consumer Survey.

Consumer confidence indicator 10/1995-5/2005

Consumers' expectations concerning their own and Finland's economy in 12 months' time 10/1995-5/2005

Consumer confidence indicator in EU Member States, April 2005
Deviation of indicator from country average 10/1995-4/2005*

*Calculated from seasonally adjusted series. Malta does not release 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, April 2005. http://europa.eu.int/comm/economy_finance/indicators/businessandconsumersurveys_en.htm

Source: Consumer Survey 2005, May. Statistics Finland

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