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Published: 27 November 2006

Consumers strongly confident in the economy in November

Consumers' confidence in the economy gained strength in November. The consumer confidence indicator stood at 17.9 in November whereas in October it was 14.9 and twelve months ago 14.6. At the same time, confidence in the economy was clearly stronger than the long-term average. The data are based on Statistics Finland's Consumer Survey, for which 1,426 people resident in Finland were interviewed between 1 and 17 November.

Consumers' confidence in all four components of the consumer confidence indicator improved from the previous month in November. Compared to last year, expectations concerning the development of employment improved clearly. Consumers' views concerning Finland's economy remained cautious in November. However, they were highly confident about their own economy and believed strongly that they could make savings and that saving was worthwhile. Households had more intentions to purchase entertainment electronics in November than ever before.

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

	November 2006 balance figure	October 2006 balance figure	November 2005 balance figure	Average 10/95-11/06
Consumer confidence indicator (CCI)	17.9	14.9	14.6	13.6
CCI components:
Own economic situation in 12 months' time	12.9	9.7	11.8	9.3
Household's saving possibilities in the next 12 months	47.5	43.7	47.5	33.3
General economic situation in Finland in 12 months' time	3.3	0.9	1.4	6.5
Unemployment in Finland in 12 months' time	7.8	5.4	-2.2	5.3
Others:
Inflation in 12 months' time. %	2.3	2.3	2.3	2.0
Personal threat of unemployment at present	4.2	1.4	4.8	..
Financial situation of household at present	30.9	30.8	29.9	25.3
Favourable time to make major purchases at present	20.9	21.9	19.4	21.0
Favourable time to save at present	27.3	26.8	13.9	7.0
Favourable time to raise a loan at present	17.0	17.2	31.1	23.0
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 November, 24 per cent of consumers believed that Finland's economic situation would improve in the coming twelve months, while 17 per cent of them thought that the country's economy would deteriorate. The respective proportions in October were 22 and 20 per cent. In all, 31 per cent of consumers believed in November that their own economy would improve whereas one month earlier 27 per cent of them had thought so. Only 9 per cent of consumers feared that their own economy would worsen over the year.

Altogether 23 per cent of consumers thought in November that unemployment would increase over the year, while 40 per cent of them believed it would decrease. Twelve months earlier, the corresponding proportions were 35 and 32 per cent. In November, 10 per cent of employed persons reckoned that their personal threat of unemployment had grown over the past few months but 13 per cent thought it had lessened.

Consumers predicted in November that consumer prices would go up by 2.3 per cent over the next 12 months. The long-term predicted inflation rate is 2.0 per cent.

Saving was considered worthwhile by a record 72 per cent of consumers in November. Sixty-four 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 November, 64 per cent of consumers regarded the time good for raising a loan. As recently as one year ago the respective proportion was still 74 per cent. In November, 13 per cent of households were planning to take out a loan within one year.

In November, 44 per cent of consumers regarded the time favourable for buying durable goods. Households had abundant intentions for spending money on, for example, home furnishings and hobby equipment. A record proportion of more than a half, or 54 per cent, of households intended to purchase entertainment electronics in the coming six months. In the next twelve months, 19 per cent of households were fairly or very certain to buy a car and 7 per cent a dwelling.

Wide diffusion of digital set-top boxes yet to come

The Consumer Survey also provides up-to-date data about the diffusion of home technology among households. For example, in early November 49 per cent of households had a digital set-top box and 37 per cent of them were thinking of buying one within the next six months.

The recent public debate about the television licence fee clearly influenced answers concerning the ownership of television and its peripheral devices in November, especially as regards young respondents living alone.

Consumer confidence indicator 10/1995-11/2006

Consumers' expectations concerning their own and Finland's economy in 12 months' time 10/1995-11/2006

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

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

Source: Consumer Survey 2006, November 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 27.11.2006