Consumer confidence steadily weak in August 2023 – intentions to buy a dwelling low

Consumer confidence in areas of residence and population groups

In August, consumer confidence in the economy was exceptionally strongest in Eastern Finland (CCI -1.0). Confidence was weakest in Southern Finland outside Greater Helsinki (-10.6) and in Northern Finland (-10.5). Among population groups, upper-level salaried employees were most optimistic (-2.2) in August. Pensioners clearly had the gloomiest expectations concerning economic development (-14.4). More detailed information is available in the figures and database tables.

Consumers' own and Finland's economy

In August, consumers’ estimates concerning their own economy at present improved slightly from the previous month but weakened compared to the previous year and still remained on a very weak level. In addition, expectations concerning both consumers’ own and Finland's economy in 12 months remained subdued.

However, expectations concerning Finland's economy improved in August both compared to the month before and the year before. Consumers' expectations concerning their own economy remained almost unchanged month-on-month but improved clearly from the previous year.

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Thirty-one per cent of consumers thought in August that their own economy was weaker than one year ago. Twenty-three per cent of consumers regarded their own economy stronger at the time of the survey than one year ago. Altogether 61 per cent of consumers thought that Finland’s economy is now worse than one year earlier, and nine per cent considered it to be better.

In August, 24 per cent of consumers believed that Finland’s economic situation would improve in the coming twelve months, while 32 per cent of them thought that the country’s economy would deteriorate. In all, 27 per cent of consumers believed in August that their own economy would improve and 18 per cent of them feared it would worsen over the year.

Unemployment and its threat

Consumers’ expectations about the development of the general unemployment situation in Finland weakened clearly in August but still remained on the long-term average level. Only 19 per cent of consumers expected that unemployment would decrease over the year and as many as 43 per cent believed it would increase.

Employed consumers (wage and salary earners and self-employed persons) reckoned in August that their personal threat of unemployment or lay-off had remained almost unchanged. The threat was estimated to be on the long-term average level. Six per cent of employed persons believed that their personal threat of unemployment had lessened and 16 per cent thought the risk had grown. One half or 49 per cent of employed persons felt in August that they were not threatened by unemployment or lay-off at all.

Inflation

In August, consumers’ estimates of inflation at the time of the survey decreased slightly and expectations concerning the change in prices in one year’s time remained unchanged. Both of these were still at a high level.

Consumers estimated in August that consumer prices have risen by 7.4 per cent from August last year and would go up by 4.3 per cent over the next year. Altogether 86 per cent of consumers thought that prices had gone up much or fairly much over the year. Clearly fewer consumers, or 31 per cent, expected prices to rise at least at the same rate in coming months as well.

Financial situation, saving and raising a loan

As already for a long time, the time was considered very poor for taking out a loan and also for saving in August. Only nine per cent of consumers regarded the time favourable for taking out a loan and 39 per cent considered saving worthwhile. At the same time, intentions to take out a loan were also quite low. In August, 15 per cent of consumers were planning to take out a loan within one year.

Consumers’ estimates concerning their own financial situation weakened in August from good to long-term average. At the same time, it was expected that there would be slightly fewer saving possibilities in the coming months than in general. In August, 54 per cent of consumers had been able to lay aside some money and 71 per cent believed they would be able to do so during the next 12 months.

Spending and intentions to make large purchases

In August, the time was still regarded very unfavourable for buying durable goods. Only nine per cent of consumers thought the time was favourable for making expensive purchases.

Consumers’ intentions to spend money on durable goods in the next 12 months were still very low in August. There was not much change in purchasing intentions compared to July or the year before. In August, nine per cent of consumers planned on increasing and 45 per cent on reducing their spending on durable goods over the next 12 months.

In August, there were slightly fewer plans than usual to buy a car during the next 12 months. Intentions to buy a dwelling fell clearly below the long-term average level – intentions were roughly as few as in 2016 or more than two decades ago. Also, fewer consumers than usual considered renovating their dwelling in August.

In August, 13 per cent of consumers were either definitely or possibly going to buy a car during the next 12 months. Only 10 per cent of consumers considered buying a dwelling or building a house. Only 14 per cent of consumers were planning to spend money on renovating their dwelling during the next 12 months.

Data set for the statistics

The Consumer Confidence Survey is carried out with a web questionnaire and by telephone interviews. Answers are mainly given by means of answer options. In August 2023, a total of 1 214 persons participated in the Survey and the response rate was 55.5 per cent. Of the responses, 80 per cent came from the web questionnaire.

The components of the consumer confidence indicator (CCI) are: own economy now, own economy in 12 months, Finland's economy in 12 months and own intentions to buy durable goods in the next 12 months.

EU results

The (seasonally adjusted) survey results concerning economic expectations for all EU countries are released monthly on the European Commission website.