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Published: 27 March 2007

Consumer confidence unchanged in March

In March consumers' confidence in the economy remained roughly unchanged from February. The consumer confidence indicator stood at 16.5 in March. When compared with one year ago and with the long-term average, confidence in the economy was stronger. Confidence strengthened from autumn until January, but has weakened slightly since then. The data are based on Statistics Finland's Consumer Survey, for which 1,555 people resident in Finland were interviewed between 1 and 19 March.

Of the four components of the consumer confidence indicator, expectations of Finland's unemployment improved but expectations of one's own economy weakened slightly in March compared with the previous month. Consumers' estimates of their saving possibilities and Finland's economy remained unchanged. Consumers no longer regarded raising a loan as very favourable, but this did not attenuate their intentions of raising a loan or buying a dwelling.

Consumer views on the economic and financial conditions in Finland in March 2007

	March 2007 balance figure	February 2007 balance figure	March 2006 balance figure	Average 10/95-3/07
Consumer confidence indicator (CCI)	16.5	16.8	12.6	13.7
CCI components:
Own economic situation in 12 months' time	12.2	14.1	11.3	9.4
Household's saving possibilities in the next 12 months	50.4	50.9	50.9	33.7
General economic situation in Finland in 12 months' time	1.3	1.4	-0.1	6.4
Unemployment in Finland in 12 months' time	2.0	0.7	-11.8	5.3
Others:
Inflation in 12 months' time. %	2.3	2.4	2.2	2.0
Personal threat of unemployment at present	5.6	4.7	3.7	..
Financial situation of household at present	32.6	35.1	32.1	25.5
Favourable time to make major purchases at present	23.1	26.5	24.7	21.1
Favourable time to save at present	31.0	32.4	18.1	7.7
Favourable time to raise a loan at present	8.4	15.4	23.9	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 March, 24 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. In all, 30 per cent of consumers believed in March that their own economy would improve and only 10 per cent of them feared it would worsen over the year.

Altogether 31 per cent of consumers thought in March that unemployment would increase over the year, and 37 per cent of them believed it would decrease. Twelve months previously, the corresponding proportions were dismal: 44 and 26 per cent. In March, 11 per cent of employed persons reckoned that their personal threat of unemployment had grown over the past few months, whereas more, or 16 per cent, thought it had lessened.

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

As many as 76 per cent of consumers considered saving worthwhile in March. Twelve months earlier the corresponding percentage was 64. Sixty-seven per cent of households had been able to lay aside some money and 82 per cent believed they would be able to do so during the next 12 months.

In March, 57 per cent of consumers regarded the time good for raising a loan. One month ago the respective proportion was 63 per cent and one year ago 69 per cent. Still, in March 18 per cent of households, which is the highest proportion since August 2003, were planning to take out a loan within one year.

In March, 46 per cent of consumers thought the time was favourable for buying durable goods. Many 14households intended to spend money on, for example, home repairs and furnishings or hobby equipment. Forty-one per cent of households considered purchasing a digital set-top box by autumn. Major purchases also remained attractive; 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 10/1995-3/2007

Consumers' expectations concerning their own and Finland's economy in 12 months' time 10/1995-3/2007

Consumer confidence indicator in EU Member States, February 2007
Deviation of indicator from country average 10/1995 - 2/2007*

*Calculated from seasonally adjusted series
Source: European Commission, DG ECFIN, Business and Consumer Survey Results, February 2007
http://europa.eu.int/comm/economy_finance/indicators/businessandconsumersurveys_en.htm

Source: Consumer Survey 2007, March. 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 27.3.2007