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Published: 27 July 2011

Consumers' confidence in Finland's economy ever weaker

Consumers’ general confidence in the economy remained unchanged from the previous month in July. The consumer confidence indicator stood at 11.3 in July, having been 11.4 in June and 15.4 in May. Confidence in the economy was weaker in July than one year earlier (19.1) and below the long-term average (13.3). The data are based on Statistics Finland’s Consumer Survey, for which 1,388 people resident in Finland were interviewed between 1 and 19 July.

Consumer confidence indicator

Of the four components of the consumer confidence indicator, only expectations concerning Finland's economy weakened in July from the month before. Assessments about economic growth were the most pessimistic since the beginning of 2009. By contrast, consumers' views concerning the development of unemployment and their own economy improved slightly in July but were still gloomier than the long-term average. Assessments about own saving possibilities remained unchanged and bright. In addition, consumers felt hardly any threat of personal unemployment. In July, consumers thought prices would rise ever faster and considered saving more worthwhile than purchasing of durable goods or raising a loan.

Only 24 per cent of consumers believed in July that Finland’s economic situation would improve in the coming twelve months, while more, or 34 per cent, of them thought that the country’s economy would deteriorate. In June, the corresponding proportions were 26 and 30 per cent and in last year's July very optimistic 51 and 10 per cent. In all, 26 per cent of consumers believed in July that their own economy would improve while 15 per cent of them feared it would worsen over the year. One month earlier, the corresponding proportions were 25 and 17 per cent, and one year earlier 26 and 11 per cent.

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

Altogether 31 per cent of consumers thought in July that unemployment would decrease in Finland over the next year, while 28 per cent of them believed it would increase. The corresponding proportions were 29 and 30 per cent in June, and 35 and 24 per cent one year ago.

In July, 18 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. These proportions were 19 and 13 per cent in June, and 19 and 15 per cent one year ago. In July, 47 per cent of employed persons thought the threat had remained unchanged and 24 per cent felt that they were not threatened by unemployment at all.

Consumers predicted in July that consumer prices would go up by 3.6 per cent over the next 12 months. One month earlier, the predicted inflation rate was 3.4 per cent and in last year's July 2.2 per cent, while its long-term average is 2.1 per cent.

Saving was considered worthwhile by 64 per cent of consumers in July. 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.

In July, 51 per cent of consumers regarded the time good for raising a loan. One year ago, the respective proportion was 68 per cent. However, as many households as last year, or 11 per cent of them, were planning in July to take out a loan within one year.

In July, 43 per cent of consumers thought the time was favourable for buying durable goods. Twelve months ago, the respective proportion was 50 per cent. Many households were planning in July to spend money on, for instance, home repairs and furnishings, domestic appliances or travel during the next six months. Nineteen per cent of households were fairly or very certain to buy a car and 8 per cent a dwelling during the next 12 months. In last year’s July, the corresponding proportions were 16 and 6 per cent.

The population of the Consumer Survey comprises approximately 4.1 million persons and 2.5 million households in Finland. The size of the sample of the Consumer Survey is 2,200 persons monthly. In July, the non-response rate of the Survey was 36.9 per cent. The non-response rate includes those who refused from the survey or were otherwise prevented from participating as well as those who could not be contacted.

Consumers' views of the economy

	Average 10/1995-	Max. 10/1995-	Min. 10/1995-	07/2010	06/2011	07/2011	Outlook
A1 Consumer confidence indicator, CCI = (B2+B4+B7+D2)/4	13,3	22,9	-6,5	19,1	11,4	11,3	-
B2 Own economy in 12 months' time (balance)	9,1	14,1	2,3	9,2	5,2	6,2	--
D2 Household's saving possibilities in the next 12 months (balance)	37,5	52,2	10,9	40,5	44,8	45,1	+
B4 Finland's economy in 12 months' time (balance)	5,3	25,3	-27,1	21,5	-2,9	-7,1	--
B7 Unemployment in Finland in 12 months' time (balance)	1,5	27,6	-51,1	5,2	-1,3	1,0	+/-
B8 Own threat of unemployment now (balance)	1,1	7,6	-18,8	3,4	7,1	6,5	+
B6 Inflation in 12 months' time (per cent)	2,1	4,6	0,6	2,2	3,4	3,6
C1 Favourability of time for buying durable goods (balance)	21,1	41,8	-14,2	25,9	10,2	14,1	-
C2 Favourability of time for saving (balance)	11,4	36,8	-19,6	17,2	14,2	18,5	+
C3 Favourability of time for raising a loan (balance)	18,2	42,0	-47,1	23,4	3,4	1,8	--

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 (positive) 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, July. Statistics Finland

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

Director in charge: Ari Tyrkkö

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• 1. Method of the Consumer Survey (27.7.2011)

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Appendix tables

• Appendix table 1. Consumers' views and intentions (27.7.2011)

Figures

• Appendix figure 1. Consumer confidence indicator (CCI) (27.7.2011)
• Appendix figure 2. Micro and macro indicators (27.7.2011)
• Appendix figure 3. Own economy (27.7.2011)
• Appendix figure 4. Finland's economy (27.7.2011)
• Appendix figure 5. Inflation (27.7.2011)
• Appendix figure 6. Unemployment (27.7.2011)
• Appendix figure 7. Favourability of time for (27.7.2011)
• Appendix figure 8. Household's financial situation (27.7.2011)
• Appendix figure 9. Intentions to raise a loan, next 12 months (27.7.2011)
• Appendix figure10. Spending on durable goods, next 12 months vs last 12 months (27.7.2011)
• Appendix figure 11. Intentions to buy, next 12 months (27.7.2011)

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Updated 27.7.2011