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Published: 27 October 2011

Decline in consumer confidence slowed down in October

The consumer confidence indicator stood at 1.3 in October, having been 2.3 in September and 5.1 in August. In last year’s October the consumer confidence indicator received the value 20.5. The long-term average for the confidence indicator is 13.2. The data are based on Statistics Finland’s Consumer Survey, for which 1,397 people resident in Finland were interviewed between 3 and 19 October.

Consumer confidence indicator

Of the four components of the consumer confidence indicator, only expectations concerning consumers’ own economic situation improved slightly from the previous month. Expectations were still weak, however, while views of their own saving possibilities remained bright. In contrast, the already pessimistic view of the economy in general, or Finland's economy and the development of unemployment became still slightly gloomier.

In October, employed consumers also felt personally somewhat more threatened by unemployment than before. In addition, consumers considered saving in October clearly more worthwhile than purchasing of durable goods or raising a loan, in particular.

Only 15 per cent of consumers believed in October that Finland’s economic situation would improve in the coming twelve months, while 48 per cent of them thought that the country’s economy would deteriorate. In last year’s October the corresponding proportions were very optimistic 48 and 11 per cent. In October, 23 per cent of consumers believed that their own economy would improve and 14 per cent of them feared it would worsen over the year. One year ago the corresponding proportions were 26 and 10 per cent.

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

Just 12 per cent of consumers thought in October that unemployment would decrease in Finland over the year, while as many as 61 per cent of them believed it would increase. One year ago, the corresponding proportions were optimistic 37 and 24 per cent.

In October, 11 per cent of employed persons reckoned that their personal threat of unemployment had decreased over the past few months, and more of them, or 16 per cent, thought it had grown. Twelve months previously, the corresponding proportions were 17 and 11 per cent. In October, 51 per cent of employed persons thought the threat had remained unchanged and 22 per cent felt that they were not threatened by unemployment at all.

Consumers predicted in October that consumer prices would go up by 3.3 per cent over the next 12 months. The long-term predicted average inflation rate is 2.2 per cent.

In October, 63 per cent of consumers considered saving worthwhile. In all, 67 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 investment funds and insurances.

In October, 47 per cent of consumers regarded the time good for raising a loan. One year previously the corresponding proportion was 71 per cent. This October, 14 per cent of households were planning to take out a loan within one year.

In October, 38 per cent of consumers thought the time was favourable for buying durable goods. Twelve months ago, the respective proportion was 51 per cent. Consumption intentions were mostly moderate in October, but many households had plans to spend money on, for instance, travel, purchasing of home technology or home furnishings during the next six months. Nineteen 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 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 sample size of the Consumer Survey is 2,200 persons monthly. In October, the non-response rate of the Survey was 36.5 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-	10/2010	09/2011	10/2011	Outlook
A1 Consumer confidence indicator, CCI = (B2+B4+B7+D2)/4	13,2	22,9	-6,5	20,5	2,3	1,3	--
B2 Own economy in 12 months' time (balance)	9,0	14,1	2,3	9,4	4,5	5,6	--
D2 Household's saving possibilities in the next 12 months (balance)	37,7	52,2	10,9	47,1	48,9	46,5	+
B4 Finland's economy in 12 months' time (balance)	4,9	25,3	-27,1	19,2	-19,0	-19,7	--
B7 Unemployment in Finland in 12 months' time (balance)	1,1	27,6	-51,1	6,3	-25,3	-27,4	--
B8 Own threat of unemployment now (balance)	1,1	7,6	-18,8	5,7	-0,2	-1,7	-
B6 Inflation in 12 months' time (per cent)	2,2	4,6	0,6	3,0	3,2	3,3
C1 Favourability of time for buying durable goods (balance)	20,8	41,8	-14,2	26,8	4,2	2,8	--
C2 Favourability of time for saving (balance)	11,5	36,8	-19,6	19,8	19,2	17,9	+
C3 Favourability of time for raising a loan (balance)	17,9	42,0	-47,1	26,8	-2,2	-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, October. 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 (27.10.2011)

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Appendix tables

• Appendix table 1. Consumers' views and intentions (27.10.2011)

Figures

• Appendix figure 1. Consumer confidence indicator (CCI) (27.10.2011)
• Appendix figure 2. Micro and macro indicators (27.10.2011)
• Appendix figure 3. Own economy (27.10.2011)
• Appendix figure 4. Finland's economy (27.10.2011)
• Appendix figure 5. Inflation (27.10.2011)
• Appendix figure 6. Unemployment (27.10.2011)
• Appendix figure 7. Favourability of time for (27.10.2011)
• Appendix figure 8. Household's financial situation (27.10.2011)
• Appendix figure 9. Intentions to raise a loan, next 12 months (27.10.2011)
• Appendix figure10. Spending on durable goods, next 12 months vs last 12 months (27.10.2011)
• Appendix figure 11. Intentions to buy, next 12 months (27.10.2011)

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Updated 27.10.2011