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Published: 27 October 2006

Consumers regard the time favourable for saving

Consumers' confidence in the economy remained nearly unchanged in October. The consumer confidence indicator stood at 14.9 in October, having been 16.1 in September and 14.0 twelve months ago. The data are based on Statistics Finland's Consumer Survey, for which 1,514 people resident in Finland were interviewed between 2 and 19 October.

Confidence in all four components of the consumer confidence indicator weakened from the previous month in October. However, the changes were quite minor and views concerning the development of unemployment were, in fact, clearly more positive than during the same time period of last year. Consumers regarded saving more worthwhile than ever in October.

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

	October 2006 balance figure	September 2006 balance figure	October 2005 balance figure	Average 10/95-10/06
Consumer confidence indicator (CCI)	14.9	16.1	14.0	13.6
CCI components:
Own economic situation in 12 months' time	9.7	10.2	11.5	9.3
Household's saving possibilities in the next 12 months	43.7	44.6	44.3	33.2
General economic situation in Finland in 12 months' time	0.9	1.2	2.8	6.5
Unemployment in Finland in 12 months' time	5.4	8.5	-2.6	5.3
Others:
Inflation in 12 months' time. %	2.3	2.6	2.3	2.0
Personal threat of unemployment at present	1.4	5.6	2.6	..
Financial situation of household at present	30.8	30.4	30.3	25.3
Favourable time to make major purchases at present	21.9	23.9	25.3	21.0
Favourable time to save at present	26.8	25.1	19.7	6.8
Favourable time to raise a loan at present	17.2	20.5	33.3	23.1
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 October, 22 per cent of consumers believed that Finland's economic situation would improve in the coming twelve months, while 20 per cent of them thought that the country's economy would deteriorate. In all, 27 per cent of consumers believed in October that their own economy would improve and only 10 per cent feared it would worsen over the year.

Altogether 26 per cent of consumers thought in October that unemployment would increase over the year, and 38 per cent of them believed it would decrease. Twelve months earlier, the corresponding proportions were 35 and 33 per cent. In October, 12 per cent of employed persons reckoned that their personal threat of unemployment had grown over the past few months whereas 13 per cent thought it had lessened.

Consumers predicted in October that consumer prices would go up by 2.3 per cent over the next 12 months. In September, the respective predicted inflation rate was 2.6 per cent.

Saving was considered worthwhile by a record 72 per cent of consumers in October. Sixty-three 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. Households mostly intended to save for a rainy day or for a holiday trip. Bank accounts and investment funds were clearly the most popular investment targets.

In October, 64 per cent of consumers regarded the time good for raising a loan. As recently as one year ago the respective proportion was still 77 per cent. In October, 13 per cent of households were planning to take out a loan within one year.

In October, 44 per cent of consumers thought the time was favourable for buying durable goods. Households had plenty of plans to spend money, especially on entertainment electronics. Thirty-three per cent of households were thinking of buying a digital set-top box in the next six months. In the next twelve months, 18 per cent of households were fairly or very certain to buy a car and 9 per cent a dwelling.

Consumer confidence indicator 10/1995-10/2006

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

Consumer confidence indicator in EU Member States, September 2006
Deviation of indicator from country average 10/1995-9/2006*

*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, September 2006
http://europa.eu.int/comm/economy_finance/indicators/businessandconsumersurveys_en.htm

Source: Consumer Survey 2006, October. 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 27.10.2006