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Published: 27 May 2011

Consumer confidence weakened, but not concerning own economy

In May the consumer confidence indicator stood at 15.4, while in April it was 17.8 and in March 17.7. This May, confidence in the economy was at the same level as one year earlier and slightly above the long-term average. The data are based on Statistics Finland’s Consumer Survey, for which 1,461 people resident in Finland were interviewed between 2 and 19 May.

Consumer confidence indicator

Of the four components of the consumer confidence indicator, only the expectations concerning consumers’ own economic situation improved somewhat in May from the month before. The other components deteriorated. Views on their own saving possibilities were still bright, however. In contrast, consumers' views of Finland's economy and development of unemployment fell in May even lower than the long-term average. Consumers did not much feel personally threatened by unemployment. In May consumers thought prices would rise fast and considered saving worthwhile instead of taking out a loan or making major purchases.

In May, 32 per cent of consumers believed that Finland’s economic situation would improve in the coming twelve months, while 24 per cent of them thought that the country’s economy would deteriorate. In April the corresponding proportions were 36 and 19 per cent and in last year's May 43 and 21 per cent. In all, 29 per cent of consumers believed in May that their own economy would improve and 13 per cent of them feared it would worsen over the year. One month earlier these proportions were 27 and 12 per cent.

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

Altogether 34 per cent of consumers thought in May that unemployment would decrease in Finland over the year, and 30 per cent of them believed it would increase. In April the respective proportions were 35 and 23 per cent and twelve months ago gloomy at 28 and 38 per cent.

In May, 17 per cent of employed persons believed that their personal threat of unemployment had lessened over the past few months, whereas 12 per cent thought it had grown. Twelve months previously, these proportions were also still gloomy at 15 and 18 per cent. In May, 45 per cent of employed persons thought the threat of unemployment had remained unchanged, while 26 per cent felt that they were not threatened by unemployment at all.

Consumers predicted in May that consumer prices would go up by 3.4 per cent over the next 12 months. In May last year the predicted inflation rate was 2.3 per cent, and its long-term average is 2.1 per cent.

A total of 63 per cent of consumers considered saving worthwhile in May. Sixty-four 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 May, 54 per cent of consumers regarded the time good for raising a loan. In April the respective proportion was 61 per cent and one year earlier 67 per cent. However, as many households as previously, or 13 per cent, were planning in May to take out a loan within one year.

Only 38 per cent of consumers thought in May that the time was favourable for making major purchases. One month earlier the respective proportion was 45 per cent and one year earlier 51 per cent. Nevertheless, many households were planning in May to spend money on, for instance, home repairs and home furnishings or purchases of hobby equipment and domestic appliances during the next six months. Eighteen per cent of households were fairly or very certain to buy a car and more households than before, that is, 10 per cent, to buy a dwelling during the next 12 months. In last year’s May the corresponding proportions were 17 and 7 per cent.

Consumers' views of the economy

	Average 10/1995-	Max. 10/1995-	Min. 10/1995-	05/2010	04/2011	05/2011	Outlook
A1 Consumer confidence indicator, CCI = (B2+B4+B7+D2)/4	13,4	22,9	-6,5	15,8	17,8	15,4	+
B2 Own economy in 12 months' time (balance)	9,1	14,1	2,3	10,3	8,2	10,0	+
D2 Household's saving possibilities in the next 12 months (balance)	37,5	52,2	10,9	49,3	49,0	46,5	+
B4 Finland's economy in 12 months' time (balance)	5,4	25,3	-27,1	10,0	8,3	3,7	+/-
B7 Unemployment in Finland in 12 months' time (balance)	1,5	27,6	-51,1	-6,5	5,9	1,6	+/-
B8 Own threat of unemployment now (balance)	1,0	7,6	-18,8	-0,8	6,0	6,2	+
B6 Inflation in 12 months' time (per cent)	2,1	4,6	0,6	2,3	3,3	3,4
C1 Favourability of time for buying durable goods (balance)	21,2	41,8	-14,2	25,8	20,1	8,8	--
C2 Favourability of time for saving (balance)	11,3	36,8	-19,6	16,5	16,7	18,0	+
C3 Favourability of time for raising a loan (balance)	18,4	42,0	-47,1	22,2	13,3	6,7	-

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 2011, May. Statistics Finland

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

Director in charge: Ari Tyrkkö

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• 1. Method of the Consumer Survey (27.5.2011)

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Appendix tables

• Appendix table 1. Consumers' views and intentions (27.5.2011)

Figures

• Appendix figure 1. Consumer confidence indicator (CCI) (27.5.2011)
• Appendix figure 2. Micro and macro indicators (27.5.2011)
• Appendix figure 3. Own economy (27.5.2011)
• Appendix figure 4. Finland's economy (27.5.2011)
• Appendix figure 5. Inflation (27.5.2011)
• Appendix figure 6. Unemployment (27.5.2011)
• Appendix figure 7. Favourability of time for (27.5.2011)
• Appendix figure 8. Household's financial situation (27.5.2011)
• Appendix figure 9. Intentions to raise a loan, next 12 months (27.5.2011)
• Appendix figure10. Spending on durable goods, next 12 months vs last 12 months (27.5.2011)
• Appendix figure 11. Intentions to buy, next 12 months (27.5.2011)

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Updated 27.5.2011