Home > Statistics > Consumer Confidence > 2008 > November > Consumers' views on unemployment have grown gloomier

Published: 27 November 2008

Consumers' views on unemployment have grown gloomier

Consumers' confidence in the economy continued to weaken in November. The consumer confidence indicator stood at -4.5 in November, having been -0.2 in October and 8.1 in September. Confidence in the economy was also clearly weaker when compared with one year ago and with the long-term average. The data are based on Statistics Finland's Consumer Survey, for which 1,487 people resident in Finland were interviewed between 3 and 19 November.

Of the four components of the consumer confidence indicator, only expectations concerning saving possibilities improved in November from the previous month. The already gloomy view of the development of unemployment continued to weaken clearly. Consumers' expectations concerning Finland's economy in general were also the gloomiest since the beginning of the 1990s. By contrast, consumers still expressed a little optimism in respect of their own economic situation and continued to asses their own financial situation and saving possibilities as good. However, fear of personal unemployment was clearly higher in November than before. Consumers predicted a clearly lower inflation rate for the next 12 months in November than in October.

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

	Average 10/95-	Max. 10/95-	Min. 10/95-	November 2007	October 2008	November 2008	Situation**
Consumer confidence indicator (CCI)	13.5	21.8	-4.5	14.5	-0.2	-4.5	- -
CCI components:
Own economic situation in 12 months' time	9.3	14.1	2.3	12.7	5.3	3.1	- -
Households' saving possibilities in the next 12 months	35.6	52.0	10.9	51.8	40.2	44.8	+
Finland's economic situation in 12 months time	4.4	21.7	-22.9	-7.9	-21.0	-22.9	- -
Finland's unemployment situation in 12 months time	4.8	27.6	-42.9	1.5	-25.2	-42.9	- -
Others:
Inflation in 12 months' time, per cent	2.2	4.6	0.7	3.3	3.6	2.7
Own threat of unemployment at present	4.1	7.6	-6.9	4.3	-1.0	-6.9	- -
Financial situation of household at present	26.4	35.1	14.7	31.8	29.7	31.9	++
Favourable time to make major purchases at present	19.9	37.7	-14.2	9.5	-14.2	-12.8	- -
Favourable time to save at present	10.8	36.8	-19.6	36.8	31.0	27.8	++
Favourable time to raise a loan at present	18.6	42.0	-47.1	-3.6	-47.1	-39.3	- -
* 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. Deviation of balance from average has been compared to standard deviation.

In November only 16 per cent of consumers believed that Finland's economic situation would improve in the coming twelve months, while as many as 55 per cent of them thought that the country's economy would deteriorate. Twelve months earlier the corresponding proportions were 18 and 33 per cent. In all, 21 per cent of consumers believed in November 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 32 and 10 per cent.

Altogether just 7 per cent of consumers thought in November that unemployment would decrease over the year, while as many as 77 per cent of them believed it would increase. In October the respective proportions were 12 and 57 per cent and twelve months ago 36 and 32 per cent. Only eight per cent of employed persons reckoned in November that their personal threat of unemployment had lessened over the past few months, while as many as 20 per cent thought it had grown. In October the respective proportions were 10 and 15 per cent and twelve months ago 14 and 10 per cent. In November 44 per cent of employed persons thought the threat had remained unchanged and 27 per cent felt that they were not threatened by unemployment at all.

Consumers predicted in November that consumer prices would go up by 2.7 per cent over the next 12 months. In October, the respective proportion was 3.6 per cent and at its highest in June it stood at 4.6 per cent. The long-term predicted average inflation rate is 2.2 per cent.

A total of 71 per cent of consumers considered saving worthwhile in November. Sixty-three per cent of households had been able to lay aside some money and 78 per cent believed they would be able to do so during the next 12 months. In November, only 18 per cent of consumers regarded the time good for raising a loan. Twelve months ago the respective proportion was 46 per cent. In November 10 per cent of households were planning to take out a loan within one year.

In November 33 per cent of consumers thought the time was favourable for buying durable goods. Twelve months ago the respective proportion was 40 per cent. Indeed, in November households' intentions to spend money were moderate, although many households had, for instance, plans to travel abroad during the next six months. In the next twelve months, 15 per cent of households were fairly or very certain to buy a car and 7 per cent a dwelling. Last year in November the corresponding proportions were 21 and 8 per cent.

Consumer confidence indicator (CCI) 10/1995-11/2008

Consumers' micro and macro indicators 10/1995-11/2008*

* 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, October 2008*

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

Source: Consumer Survey 2008, 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 27.11.2008