Households tempted to buy a dwelling and invest in funds

In April, consumers' confidence in the economy weakened slightly compared with the previous month. The consumer confidence indicator stood at 13.5, having been 16.4 in March. However, the confidence indicator was on the previous year's level and equal to its long-term average. Compared with the previous month, of the four components of the confidence indicator expectations of one's own economy remained unchanged in April, while the other views turned slightly in a negative direction. Confidence in one's own economy speeded up households' intentions to buy a dwelling and savings in investment funds also increased. The data are based on Statistics Finland's Consumer Survey for which 1,559 persons resident in Finland were interviewed between 1 and 19 April.

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

	April 2005 balance figure	March 2005 balance figure	April 2004 balance figure	Average 10/95-4/05
Consumer confidence indicator	13.5	16.4	13.0	13.5

Own economic situation in 12 months' time	11.9	12.0	11.2	9.1
Household's saving possibilities in the next 12 months	40.2	46.2	40.7	31.1
General economic situation in Finland in 12 months' time	4.4	8.9	8.1	7.4
Unemployment in 12 months' time	-2.5	-1.8	-8.1	6.6
Inflation in 12 months' time, %	2.1	2.1	1.6	1.9

Personal threat of unemployment at present	6.0	2.7	2.3	..
Financial situation of household at present	31.4	31.3	29.7	24.3
Favourable time to make major purchases at present	26.4	26.6	32.8	20.5
Favourable time to save at present	17.9	14.2	13.3	5.1
Favourable time to raise a loan at present	33.0	35.7	35.7	22.4
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 April, 27 per cent of consumers believed that Finland's economic situation would improve in the coming twelve months, while 18 per cent of them thought the country's economy would deteriorate. In March, the respective proportions were 33 and 15 per cent. In all, 31 per cent of consumers believed in April that their own economy would improve and only 10 per cent of them feared it would worsen over the year.

Altogether 33 per cent of consumers thought in April that unemployment would increase over the year and 29 per cent of them believed it would decrease. 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. 17 per cent thought it had lessened. One month previously the figures were equal for both. Consumers predicted that consumer prices would go up by 2.1 per cent over the next 12 months.

In April, 75 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 64 per cent of consumers in April. Sixty-four 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 the next 12 months. As many as 24 per cent of households had put money in investment funds and 22 per cent intended to do so in the coming months.

In April, 47 per cent of consumers thought the time was favourable for buying durable goods. The corresponding proportion was 55 per cent one year previously. Households still had abundant intentions to invest in home improvements, to purchase vehicles and to travel. Seventeen per cent of households were either fairly or very certain to buy a car and slightly more than before, or ten per cent, a dwelling within the next 12 months.

Consumer confidence indicator 10/1995-4/2005

Consumers' expectations concerning their own and Finland's economy in 12 months' time 10/1995-4/2005

Consumer confidence indicator in EU Member States, March 2005
Deviation of indicator from country average 10/1995-3/2005*

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

Source: Consumer Survey 2005, April. Statistics Finland

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