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Published: 27 June 2005

Consumers' confidence in the economy weakened

Consumers' confidence in the economy weakened in June both compared with the previous month and one year ago. The consumer confidence indicator stood at 8.8, having been 14.0 in May and 14.3 in June one year ago. The confidence indicator was also clearly below its long-term average. Compared with the previous month, all four components of the confidence indicator fell in June. Expectations of Finland's economy and development of unemployment darkened most. Consumers' belief in their own economy was still strong, however. The data are based on Statistics Finland's Consumer Survey for which 1,551 persons resident in Finland were interviewed between 1 and 16 May.

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

		June 2005 balance figure		May 2005 balance figure		June 2004 balance figure		Average 10/95-6/05
Consumer confidence indicator		8.8		14.0		14.3		13.5
Own economic situation in 12 months' time		9.9		11.6		10.4		9.1
Household's saving possibilities in the next 12 months		46.5		50.7		49.8		31.4
General economic situation in Finland in 12 months' time		-6.4		0.8		5.9		7.3
Unemployment in 12 months' time		-14.6		-6.9		-8.9		6.3
Inflation in 12 months' time, %		2.2		2.2		1.8		1.9
Personal threat of unemployment at present		2.7		4.7		5.2		..
Financial situation of household at present		30.0		33.6		31.1		24.4
Favourable time to make major purchases at present		22.8		26.4		28.8		20.6
Favourable time to save at present		14.9		14.3		13.7		5.2
Favourable time to raise a loan at present		31.8		35.8		26.3		22.6
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 June, 20 per cent of consumers believed that Finland's economic situation would improve in the coming twelve months, while clearly more of them, i.e. 31 per cent thought the country's economy would deteriorate. The respective proportions were 26 and 23 per cent in May and 31 and 19 per cent one year ago. In all, 28 per cent of consumers believed in June that their own economy would improve and only 11 per cent of them feared it would worsen over the year.

Altogether 46 per cent of consumers thought in June that unemployment would increase over the year and 20 per cent of them believed it would decrease. In May the corresponding proportions were 38 and 27 per cent and one year ago 38 and 22 per cent. Thirteen per cent of employed persons reckoned that their personal threat of unemployment had grown over the past few months but slightly 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 June, 74 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 June. In all, 64 per cent of households had been able to lay aside some money and 79 per cent believed they would be able to do so during the next 12 months.

In June, 46 per cent of consumers thought the time was favourable for buying durable goods. The corresponding proportion was 52 per cent one year previously. Households still had plenty of intentions to decorate their homes, to purchase leisure equipment and to travel. Sixteen per cent of households were either fairly or very certain to buy a car and 8 per cent a dwelling within the next 12 months.

Consumer confidence indicator 10/1995-6/2005

Consumers' expectations concerning their own and Finland's economy in 12 months' time 10/1995-6/2005

Consumer confidence indicator in EU Member States, May 2005
Deviation of indicator from country average 10/1995-5/2005*

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

Source: Consumer Survey 2005, June. Statistics Finland

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

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Last updated 27.6.2005