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Published: 29 August 2011

Consumers' views about Finland's economy and employment gloomier in August

Consumer confidence in the economy weakened clearly in August compared with both one month and one year ago. The consumer confidence indicator stood at 5.1 in August, whereas in July it was 11.3 and in June 11.4. In last year's August, the confidence indicator received the value 21.9. Its long-term average is 13.3. The data are based on Statistics Finland’s Consumer Survey, for which 1,446 people resident in Finland were interviewed between 1 and 19 August.

Consumer confidence indicator

Of the four components of the consumer confidence indicator, expectations concerning Finland’s economy and the development of unemployment weakened sharply in August from the previous month and especially from the corresponding period of one year ago. Estimates of the country's economy were the most pessimistic since the winter 2008 to 2009, and consumers were last more worried about growing unemployment at the beginning of 2010.

Consumers' views on their own economy also weakened slightly in August and were worse than the long-term average. By contrast, assessments concerning own saving possibilities still remained bright. Consumers felt personally threatened by unemployment slightly more than in previous months. In August consumers thought prices would rise a bit slower in future. Saving was regarded as considerably more worthwhile than purchasing of durable goods or raising a loan, in particular.

In August only 18 per cent of consumers believed that Finland’s economic situation would improve in the coming twelve months, while clearly more, or 45 per cent, of them thought that the country’s economy would deteriorate. In July the corresponding proportions were 24 and 34 per cent and in last year's August very optimistic 55 and 10 per cent. In all, 24 per cent of consumers believed in August that their own economy would improve and 15 per cent of them feared it would worsen over the year. One month earlier, the corresponding proportions were 26 and 15 per cent, and one year earlier 27 and 11 per cent.

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

In August, only 17 per cent of consumers still thought that unemployment would decrease in Finland over the next year, while as many as 42 per cent of them believed it would increase. The corresponding proportions were 31 and 28 per cent in July, and 39 and 20 per cent one year ago.

In August, 13 per cent of employed persons reckoned that their personal threat of unemployment had decreased over the past few months, but already slightly more, or 14 per cent of them, thought it had grown. These proportions were 18 and 11 per cent in July, and 17 and 14 per cent one year ago. In August, 51 per cent of employed persons thought the threat had remained unchanged and 21 per cent felt that they were not threatened by unemployment at all.

Consumers predicted in August that consumer prices would go up by 3.1 per cent over the next 12 months. One month earlier the predicted inflation rate was 3.6 per cent, and its long-term average is 2.2 per cent.

Altogether 65 per cent of consumers considered saving worthwhile in August. Sixty-three per cent of households had been able to lay aside some money and 77 per cent believed they would be able to do so during the next 12 months.

In August, 45 per cent of consumers regarded the time good for raising a loan. One month earlier the respective proportion was 51 per cent and one year earlier 64 per cent. However, more households than in July and as many as last year, or 14 per cent, were planning in August to take out a loan within one year.

In August, 41 per cent of consumers thought the time was favourable for buying durable goods. Twelve months ago the respective proportion was 52 per cent. Consumption intentions were mostly moderate in August, but many households had plans to spend money on, for instance, home furnishings, purchasing of entertainment electronics and travel during the next six months. Sixteen 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 August the corresponding proportions were 18 and 8 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 August, the non-response rate of the Survey was 34.3 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-	08/2010	07/2011	08/2011	Outlook
A1 Consumer confidence indicator, CCI = (B2+B4+B7+D2)/4	13,3	22,9	-6,5	21,9	11,3	5,1	--
B2 Own economy in 12 months' time (balance)	9,1	14,1	2,3	8,9	6,2	5,8	--
D2 Household's saving possibilities in the next 12 months (balance)	37,6	52,2	10,9	47,4	45,1	44,7	+
B4 Finland's economy in 12 months' time (balance)	5,2	25,3	-27,1	22,8	-7,1	-16,5	--
B7 Unemployment in Finland in 12 months' time (balance)	1,4	27,6	-51,1	8,5	1,0	-13,6	-
B8 Own threat of unemployment now (balance)	1,1	7,6	-18,8	3,1	6,5	1,6	+/-
B6 Inflation in 12 months' time (per cent)	2,2	4,6	0,6	2,4	3,6	3,1
C1 Favourability of time for buying durable goods (balance)	21,0	41,8	-14,2	29,0	14,1	8,4	--
C2 Favourability of time for saving (balance)	11,4	36,8	-19,6	20,2	18,5	20,6	+
C3 Favourability of time for raising a loan (balance)	18,1	42,0	-47,1	17,9	1,8	-4,4	--

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, August. 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 (29.8.2011)

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Appendix tables

• Appendix table 1. Consumers' views and intentions (29.8.2011)

Figures

• Appendix figure 1. Consumer confidence indicator (CCI) (29.8.2011)
• Appendix figure 2. Micro and macro indicators (29.8.2011)
• Appendix figure 3. Own economy (29.8.2011)
• Appendix figure 4. Finland's economy (29.8.2011)
• Appendix figure 5. Inflation (29.8.2011)
• Appendix figure 6. Unemployment (29.8.2011)
• Appendix figure 7. Favourability of time for (29.8.2011)
• Appendix figure 8. Household's financial situation (29.8.2011)
• Appendix figure 9. Intentions to raise a loan, next 12 months (29.8.2011)
• Appendix figure10. Spending on durable goods, next 12 months vs last 12 months (29.8.2011)
• Appendix figure 11. Intentions to buy, next 12 months (29.8.2011)

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Updated 29.8.2011