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Published: 27 June 2006

Consumers' confidence in economic growth and employment recovering

Consumers' confidence continued to strengthen in June. In June the consumer confidence indicator stood at 16.6, while in May it was 13.9 and still in April 9.4. In last year's June confidence in the economy was clearly lower due to the labour dispute in the paper industry. The data are based on Statistics Finland's Consumer Survey, for which 1,530 people resident in Finland were interviewed between 1 and 16 June.

Of the four components of the consumer confidence indicator expectations of one's own and Finland's economy and especially of development of unemployment improved in June compared with the previous month. However, estimates of Finland's economy and unemployment were still weaker than the long-term average. Consumers thought their saving possibilities were still excellent and considered saving more worthwhile than ever before.

Consumer views on the economic and financial conditions in Finland in June 2006

	June 2006 balance figure	May 2006 balance figure	June 2005 balance figure	Average 10/95-6/06
Consumer confidence indicator (CCI)	16.6	13.9	8.8	13.5
CCI components:
Own economic situation in 12 months' time	12.4	11.0	9.9	9.3
Household's saving possibilities in the next 12 months	48.3	49.2	46.5	32.8
General economic situation in Finland in 12 months' time	2.3	0.2	-6.4	6.7
Unemployment in Finland in 12 months' time	3.4	-4.9	-14.6	5.3
Others:
Inflation in 12 months' time, %	2.6	2.4	2.2	1.9
Personal threat of unemployment at present	3.7	2.9	2.7	..
Financial situation of household at present	29.8	31.6	30.0	25.1
Favourable time to make major purchases at present	22.6	22.0	22.8	20.9
Favourable time to save at present	23.5	22.3	14.9	6.3
Favourable time to raise a loan at present	23.1	26.4	31.8	23.2
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, 26 per cent of consumers believed that Finland's economic situation would improve in the coming twelve months, while 21 per cent of them thought that the country's economy would deteriorate. The corresponding proportions were 24 and 23 per cent in May and 20 and 31 per cent one year ago. In all, 31 per cent of consumers believed in June that their own economy would improve and only 10 per cent of them feared it would worsen over the year.

Altogether 29 per cent of consumers thought in June that unemployment would increase over the year, and 37 per cent of them believed it would decrease. The corresponding proportions were 38 and 32 per cent in May and 46 and 20 per cent one year ago. Twelve per cent of employed persons reckoned in June that their personal threat of unemployment had grown over the past few months whereas 14 per cent thought it had lessened.

Consumers predicted in June that consumer prices would go up by 2.6 per cent over the next 12 months. One month ago the respective predicted inflation rate was 2.4 per cent and one year ago 2.2 per cent.

In June, 68 per cent of consumers thought the time was good for raising a loan and 16 per cent of households were planning to take out a loan in the next 12 months. Saving was considered worthwhile by record 69 per cent of consumers in June. Sixty-five per cent of households had been able to lay aside some money and 80 per cent believed they would be able to do so during the next 12 months.

In June, 44 per cent of consumers thought the time was favourable for buying durable goods. Households had plenty of spending intentions on, for example, entertainment electronics and hobby and sports equipment. Twenty-four per cent of households were thinking of buying a digital box within six months. In the next twelve months, 17 per cent of households were fairly or very certain to buy a car and 8 per cent a dwelling.

Consumer confidence indicator 10/1995-6/2006

Consumers' expectations concerning their own and Finland's economy in 12 months' time 10/1995-6/2006

Consumer confidence indicator in EU Member States, May 2006
Deviation of indicator from country average 10/1995-5/2006*

*Calculated from seasonally adjusted series. Data for France are indicative due to break in time series.
Averages for a shorter time period: Malta 11/2002-, Luxembourg 1/2002-, Cyprus, Lithuania and Poland 1/2001-, Slovakia 4/1999-.
Source: European Commission, DG ECFIN, Business and Consumer Survey Results, May 2006
http://europa.eu.int/comm/economy_finance/indicators/businessandconsumersurveys_en.htm

Source: Consumer Survey 2006, June. Statistics Finland

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

Director in charge: Mr Ari Tyrkkö

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Last updated 27.6.2006