Home > Statistics > Consumer Confidence > 2008 > June > Consumers' views gloomy about borrowing and Finland's economy

Published: 27 June 2008

Consumers' views gloomy about borrowing and Finland's economy

Consumers' confidence in the economy weakened again slightly in June. The consumer confidence indicator stood at 10.2 in June whereas in May it was 11.1 and in April 12.6. At the same time, confidence in the economy was clearly weaker than 12 months earlier and below the long-term average. The data are based on Statistics Finland's Consumer Survey, for which 1,497 people resident in Finland were interviewed between 2 and 18 June.

Of the four components of the consumer confidence indicator, unemployment was the only one where expectations did not weaken from the previous month in June. However, only minor changes took place in all components in the course of the month. In June, consumers' expectations concerning Finland's economy were the gloomiest since the end of 1990. At the same time their assessments about their own economic situation were also the most cautious since summer 1997. Nevertheless, consumers continued to regard their own employment prospects and saving possibilities as good. June was not regarded a favourable time for making major purchases or for raising a loan, in particular. In addition, inflation was predicted to continue accelerating clearly.

Consumer views on the economic and financial conditions in Finland in June 2008, balances*

	Average 10/95-	Max. 10/95-	Min. 10/95-	June 2007	May 2008	June 2008	Situation**
Consumer confidence indicator (CCI)	13.9	21.8	3.5	20.4	11.1	10.2	-
CCI components:
Own economic situation in 12 months' time	9.5	14.1	2.3	12.2	6.6	5.8	- -
Households' saving possibilities in the next 12 months	35.2	52.0	10.9	51.8	47.9	46.9	+
Finland's economic situation in 12 months time	5.2	21.7	-17.0	3.6	-14.3	-17.0	- -
Finland's unemployment situation in 12 months time	5.5	27.6	-22.7	14.1	4.3	5.0	-
Others:
Inflation in 12 months' time, per cent	2.1	4.6	0.7	2.5	4.2	4.6
Own threat of unemployment at present	4.4	7.6	0.8	5.1	6.2	6.4	++
Financial situation of household at present	26.2	35.1	14.7	34.0	32.9	31.1	+
Favourable time to make major purchases at present	20.7	37.7	-2.1	14.6	8.2	2.9	- -
Favourable time to save at present	10.2	36.8	-19.6	33.1	31.1	29.7	++
Favourable time to raise a loan at present	20.4	42.0	-20.8	3.6	-5.8	-20.8	- -
* 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 the CCI components. The balance figures and the confidence indicator can range between -100 and 100 - the higher the balance figure the brighter the view on the economy. ** ++ Situation is very good, + Situation is good, - Situation is bad, - - Situation is very bad.

In June, only 12 per cent of consumers believed that Finland's economic situation would improve in the coming twelve months, while as many as 43 per cent of them thought that the country's economy would deteriorate. Twelve months earlier the corresponding proportions were 27 and 19 per cent. In all, 24 per cent of consumers believed in June that their own economy would improve and 15 per cent of them feared it would worsen over the year. One year ago the corresponding proportions were 31 and 10 per cent.

Altogether 35 per cent of consumers thought in June that unemployment would decrease over the year, while 24 per cent of them believed it would increase. Twelve months earlier the corresponding proportions were slightly better at 48 and 20 per cent. Seventeen per cent of employed persons reckoned that their personal threat of unemployment had lessened over the past few months, while 10 per cent thought it had grown.

Consumers predicted in June that consumer prices would go up by as much as 4.6 per cent over the next 12 months. The long-term predicted average inflation rate is 2.1 per cent.

In June, 74 per cent of consumers considered saving worthwhile. 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, only 31 per cent of consumers - the smallest proportion since the beginning of 1993 - regarded the time good for raising a loan. In May, the respective proportion was 43 per cent and one year ago 53 per cent. However, only slightly fewer households than before, or 12 per cent of them, were planning in June to raise a loan within one year.

No more than 37 per cent of consumers regarded June as favourable time for buying durable goods. As recently as in March-April, 48 per cent of households still thought so. Indeed, households' intentions to spend money were more moderate than before in June, although they still had plans to travel and purchase hobby equipment, among other things, during the next six months. Sixteen per cent of households were fairly or very certain to buy a car and 8 per cent a dwelling during the next 12 months

Consumer confidence indicator (CCI) 10/1995-6/2008

Consumers' micro and macro indicators 10/1995-6/2008*

* Micro indicator is the average of three balances: own economy and household's saving possibilities in 12 months' time, and
household's financial situation at present.
Macro indicator is the average of two balances: Finland's economy and unemployment in 12 months' time.

Deviation of CCI from country average in EU member states, May 2008

* Calculated from seasonally adjusted series. Average: 10/1995-
Source: European Commission, DG ECFIN, Business and Consumer Survey Results, May 2008
http://ec.europa.eu/economy_finance/db_indicators/db_indicators8650_en.htm

Source: Consumer Survey 2008, 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 27.6.2008