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Published: 29 August 2005

Consumer confidence strengthened further in August

Consumers' confidence in the economy recovered in August from the drop in the summer to the level of last spring. The consumer confidence indicator stood at 13.6 in August, having been 10.3 in July and 8.8 in June. The consumer confidence indicator also reached its long-term average. The data are based on Statistics Finland's Consumer Survey for which 1,562 persons resident in Finland were interviewed between 1 and 19 August.

Compared with the previous month, of the four components of the confidence indicator expectations of Finland's economy, general unemployment and households' saving possibilities improved in August. Views on unemployment were still pessimistic, however. Consumers' belief in their own economy remained unchanged and strong.

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

		August 2005 balance figure		July 2005 balance figure		August 2004 balance figure		Average 10/95-8/05
Consumer confidence indicator		13.6		10.3		14.8		13.5
Own economic situation in 12 months' time		11.8		11.6		10.8		9.1
Household's saving possibilities in the next 12 months		47.2		42.0		46.7		31.7
General economic situation in Finland in 12 months' time		2.0		-0.7		6.3		7.1
Unemployment in Finland in 12 months' time		-6.5		-11.9		-4.5		6.0
Inflation in 12 months' time, %		2.2		2.3		2.1		1.9
Personal threat of unemployment at present		5.2		2.7		5.9		..
Financial situation of household at present		32.5		33.3		30.6		24.6
Favourable time to make major purchases at present		27.3		31.3		29.4		20.7
Favourable time to save at present		13.9		12.6		12.6		5.4
Favourable time to raise a loan at present		35.3		36.7		29.9		22.8
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 August, 27 per cent of consumers believed that Finland's economic situation would improve in the coming twelve months. Of consumers 22 per cent thought that the country's economy would deteriorate. The respective proportions were 24 and 24 per cent in July and 32 and 19 per cent one year ago. In all, 28 per cent of consumers believed in August that their own economy would improve and only 8 per cent of them feared it would worsen over the year.

Altogether 38 per cent of consumers thought in August that unemployment would increase over the year, and 27 per cent of them believed it would decrease. In July the corresponding proportions were 43 and 22 per cent. Twelve 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 August, 48 per cent of consumers thought the time was favourable for buying durable goods. The corresponding proportion was 52 per cent one month and one year previously. Households still had plenty of intentions to travel and to purchase entertainment electronics and leisure equipment. Eighteen per cent of households were either fairly or very certain to buy a car and more than before, 10 per cent, a dwelling within the next 12 months.

Views on taking out a loan and saving were more or less unchanged in August. Of consumers, 76 per cent thought the time was good 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 61 per cent of consumers in August. In all, 67 per cent of households had been able to lay aside some money and 77 per cent believed they would be able to do so during 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 August interviews for the Consumer Survey.

Consumer confidence indicator 10/1995-8/2005

Consumers' expectations concerning their own and Finland's economy in 12 months' time 10/1995-8/2005

Consumer confidence indicator in EU Member States, July 2005
Deviation of indicator from country average 10/1995-7/2005*

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

Source: Consumer Survey 2005, August. Statistics Finland

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

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Last updated 29.8.2005