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Published: 27 October 2010

Consumer confidence still strong in October

Consumers' confidence in the economy was in October somewhat weaker than the record level of August and September. The consumer confidence indicator stood at 20.5 in October, having been 22.9 (revised data) in September and 21.9 in August. Compared to one year ago and the long-term average, confidence in the economy was still clearly stronger in October. The data are based on Statistics Finland’s Consumer Survey, for which 1,408 people resident in Finland were interviewed between 1 and 20 October.

Consumer confidence indicator

Of the four components of the consumer confidence indicator, expectations concerning Finland’s economy and development of unemployment weakened slightly in October from the previous month. However, views on the economy in general were still strong. In October consumers’ views about their own economy and saving possibilities remained more or less unchanged and bright as concerns saving. In addition, consumers thought inflation would accelerate and considered the time favourable for taking out a loan.

In October, 48 per cent of consumers believed that Finland’s economic situation would improve in the coming twelve months, while only 11 per cent of them thought that the country’s economy would deteriorate. In September the respective proportions were 56 and eight per cent and twelve months ago 57 and 14 per cent. In October, 26 per cent of consumers believed that their own economy would improve and ten per cent of them feared it would worsen over the year.

Consumers' expectations concerning their own and Finland's economy in 12 months' time

Altogether 37 per cent of consumers thought in October that unemployment would decrease in Finland over the year, while 24 per cent of them believed it would increase. The corresponding proportions were 39 and 21 per cent in September and gloomy 17 and 58 per cent one year ago.

In October 17 per cent of employed persons believed that their personal threat of unemployment had lessened over the past few months, whereas 11 per cent thought it had grown. Twelve months previously, the corresponding proportions were gloomy nine and 30 per cent. In October, 45 per cent of employed persons thought the threat had remained unchanged and 26 per cent felt that they were not threatened by unemployment at all.

Consumers predicted in October that consumer prices would go up by 3.0 per cent over the next 12 months. In September the predicted inflation rate was 2.6 per cent, and its long-term average is 2.1 per cent.

In all, 66 per cent of consumers considered saving worthwhile in October. One year previously the corresponding proportion was 55 per cent. Sixty-six per cent of households had been able to lay aside some money and 79 per cent believed they would be able to do so during the next 12 months. Households mostly save for a rainy day. After the popular fixed-term or investment accounts, the most common investment targets were insurances and investment funds.

In October, 71 per cent of consumers regarded the time good for raising a loan. This October, 13 per cent of households were planning to take out a loan within one year.

In October, 51 per cent of consumers thought the time was favourable for buying durable goods. Twelve months earlier the corresponding percentage was 59. Many households were planning to spend money on, for instance, travelling, dwelling repairs or purchasing of hobby equipment during the next six months. Eighteen per cent of households were fairly or very certain to buy a car and eight per cent a dwelling during the next 12 months. In last year’s October the corresponding proportions were 16 and eight per cent.

Consumers' views of the economy

	Average 10/1995-	Max. 10/1995-	Min. 10/1995-	10/2009	09/2010	10/2010	Outlook
A1 Consumer confidence indicator, CCI = (B2+B4+B7+D2)/4	13,2	22,9	-6,5	12,3	22,9	20,5	++
B2 Own economy in 12 months' time (balance)	9,1	14,1	2,3	9,0	9,2	9,4	+/-
D2 Household's saving possibilities in the next 12 months (balance)	37,0	52,0	10,9	43,0	48,8	47,1	+
B4 Finland's economy in 12 months' time (balance)	5,2	25,3	-27,1	21,4	25,3	19,2	++
B7 Unemployment in Finland in 12 months' time (balance)	1,4	27,6	-51,1	-24,1	8,5	6,3	+
B6 Inflation in 12 months' time (per cent)	2,1	4,6	0,6	2,1	2,6	3,0
C1 Favourability of time for buying durable goods (balance)	21,3	41,8	-14,2	36,3	30,1	26,8	+
C2 Favourability of time for saving (balance)	11,0	36,8	-19,6	7,3	19,2	19,8	+
C3 Favourability of time for raising a loan (balance)	18,5	42,0	-47,1	23,0	26,7	26,8	+

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.

Explanations for Outlook column: ++ Outlook is very good, + Outlook is good, +/- Outlook is neutral, - Outlook is poor,-- Outlook is very poor. Deviation of balance from average has been compared to standard deviation.

The (seasonally adjusted) Consumer Survey results for all EU countries will be later released on the European Commission website: European Commission, DG ECFIN, Business and Consumer Survey Results; http://ec.europa.eu/economy_finance/db_indicators/surveys/index_en.htm

Source: Consumer Survey 2010, October. Statistics Finland

Inquiries: Pertti Kangassalo (09) 1734 3598, kuluttaja.barometri@stat.fi

Director in charge: Ari Tyrkkö

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Reviews

• 1. Overview of the past (27.10.2010)
• 2. Method of the Consumer Survey (27.10.2010)

Tables

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Appendix tables

• Appendix table 1. Consumers' views and intentions (27.10.2010)

Figures

• Appendix figure 1. Consumer confidence indicator (CCI) (27.10.2010)
• Appendix figure 2. Micro and macro indicators (27.10.2010)
• Appendix figure 3. Own economy (27.10.2010)
• Appendix figure 4. Finland's economy (27.10.2010)
• Appendix figure 5. Inflation (27.10.2010)
• Appendix figure 6. Unemployment (27.10.2010)
• Appendix figure 7. Favourability of time for (27.10.2010)
• Appendix figure 8. Household's financial situation (27.10.2010)
• Appendix figure 9. Intentions to raise a loan, next 12 months (27.10.2010)
• Appendix figure10. Spending on durable goods, next 12 months vs last 12 months (27.10.2010)
• Appendix figure 11. Intentions to buy, next 12 months (27.10.2010)

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Updated 27.10.2010