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Published: 28 May 2007

Consumers now consider saving very worthwhile

Consumers' confidence in the economy remained unchanged from the previous month in May. The consumer confidence indicator stood at 17.7. When compared with one year ago and with the long-term average, confidence in the economy was stronger. The data are based on Statistics Finland's Consumer Survey, for which 1,546 people resident in Finland were interviewed between 2 and 18 May.

Of the four components of the confidence indicator, consumers' expectations concerning the development of unemployment and their own economy weakened somewhat in May from the previous month. Respectively, their views concerning Finland's economy and their own household's saving possibilities brightened slightly. Consumers' views on the favourability of saving were the brightest ever in May.

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

	May 2007 balance figure	April 2007 balance figure	May 2006 balance figure	Average 10/95-5/07
Consumer confidence indicator (CCI)	17.7	17.9	13.9	13.8
CCI components:
Own economic situation in 12 months' time	10.7	12.5	11.0	9.4
Household's saving possibilities in the next 12 months	47.7	44.0	49.2	33.9
General economic situation in Finland in 12 months' time	3.3	2.7	0.2	6.3
Unemployment in Finland in 12 months' time	9.2	12.6	-4.9	5.3
Others:
Inflation in 12 months' time. %	2.4	2.4	2.4	2.0
Personal threat of unemployment at present	6.6	5.6	2.9	..
Financial situation of household at present	30.3	31.8	31.6	25.6
Favourable time to make major purchases at present	18.7	22.0	22.0	21.1
Favourable time to save at present	33.3	30.8	22.3	8.0
Favourable time to raise a loan at present	5.6	3.7	26.4	22.5
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 May, 25 per cent of consumers believed that Finland's economic situation would improve in the coming twelve months, while 18 per cent of them thought that the country's economy would deteriorate. In all, 29 per cent of consumers believed in May that their own economy would improve and only 10 per cent of them feared it would worsen over the year.

Altogether 43 per cent of consumers thought in May that unemployment would decrease over the year, and 24 per cent of them believed it would increase. Twelve months previously, the corresponding proportions were gloomy 32 and 38 per cent. Sixteen per cent of employed persons reckoned in May that their personal threat of unemployment had lessened over the past few months while 10 per cent thought it had grown.

Consumers predicted in May that consumer prices would go up by 2.4 per cent over the next 12 months. The predicted long-term average inflation rate is 2.0 per cent.

In May, a larger proportion than ever, or 78 per cent, of consumers regarded the time favourable for saving. Twelve months earlier the corresponding figure was 67 per cent. 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. According to the interviews conducted in April, households mostly save for the rainy day or for a holiday trip and the most popular investment targets after bank accounts are diverse funds.

In May, 54 per cent of consumers regarded the time good for raising a loan. One year ago the respective percentage was 72 per cent. However, 13 per cent of households, which is roughly as many as one year previously, were planning to take out a loan within one year.

In May, 43 per cent of consumers thought the time was favourable for buying durable goods. Many households had intentions to spend money on, for instance, entertainment electronics, dwelling repairs and travelling. Even major purchases were attractive, for 19 per cent of households were fairly or very certain to buy a car and 9 per cent a dwelling in the next twelve months.

Consumer confidence indicator 10/1995-5/2007

Consumers' expectations concerning their own and Finland's economy in 12 months' time
10/1995-5/2007

Consumer confidence indicator in EU member states, April 2007
Deviation of indicator from country average 10/1995 - 4/2007*

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

Source: Consumer Survey 2007, May. 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 28.5.2007