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Published: 27 July 2012

Consumers’ confidence in the economy weakened further in July

The consumer confidence indicator stood at zero (0.1) in July, while in June it was 5.8 and in May 12.0. Confidence in the economy was also clearly weaker than one year ago and the long-term average. The data are based on Statistics Finland’s Consumer Survey, for which 1,359 persons resident in Finland were interviewed between 2 and 19 July.

Consumer confidence indicator (CCI)

Of the four components of the consumer confidence indicator only views about own household’s saving possibilities remained unchanged from June in July. The weakening of confidence that started in June continued in the other components of the confidence indicator. Assessments darkened most about Finland’s economy and the development of unemployment. Views on own economy also weakened.

Employed consumers felt in July that their personal threat of unemployment had grown slightly from June. However, consumers regarded the time favourable for saving and raising a loan.

Consumers' own and Finland's economy

In July, 16 per cent of consumers believed that Finland’s economic situation would improve in the coming twelve months, while as many as almost one-half (47%) of them thought that the country’s economy would deteriorate. In June, the respective proportions were 21 and 40 per cent and in July one year ago 24 and 34 per cent.

Good one-fifth (22%) of consumers believed in July that their own economy would improve and just under one-fifth (17%) of them feared it would worsen over the year. One year ago, these proportions were 26 and 15 per cent.

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

Unemployment and inflation

Ten per cent of consumers expected in July that unemployment would decrease over the coming year, while two-thirds, or 65 per cent, of them thought it would increase. The corresponding proportions were 16 and 49 per cent in June, and 31 and 28 per cent one year ago.

In July, 11 per cent of employed persons believed that their personal threat of unemployment had lessened over the past few months, while just under one-fifth (18%) of them thought it had grown. Almost one-half (47%) of employed persons thought the threat of unemployment had remained unchanged and 23 per cent felt that they were not threatened by unemployment at all.

Consumers predicted in July that consumer prices would go up by 2.8 per cent over the next 12 months. The long-term predicted average inflation rate is 2.2 per cent.

Saving and taking out a loan

Clearly more than one-half (58%) of consumers regarded the time favourable for saving. In July last year, the respective proportion was slightly higher, or 64 per cent. Sixty-eight per cent of households had been able to lay aside some money in July and almost one in four (79%) of them believed they would be able to do so during the coming year. Households mostly save for a rainy day. After the popular fixed-term or investment accounts, the most common investment targets are securities and insurance.

While around one-half of the respondents viewed raising a loan worthwhile twelve months ago, in July 2012 the respective share was some ten percentage points higher, or 60 per cent. In July, 13 per cent of households were planning to raise a loan within one year.

Consumers' views of the economy

	Average 10/1995-	Max. 10/1995-	Min. 10/1995-	07/2011	06/2012	07/2012	Outlook
A1 Consumer confidence indicator, CCI = (B2+B4+B7+D2)/4	12,8	22,9	-6,5	11,3	5,8	0,1	--
B2 Own economy in 12 months' time (balance)	8,9	14,1	2,3	6,2	6,4	3,6	--
B4 Finland's economy in 12 months' time (balance)	4,3	25,3	-27,1	-7,1	-11,1	-18,7	--
B6 Inflation in 12 months' time (per cent)	2,2	4,6	0,6	3,6	2,9	2,8
B7 Unemployment in Finland in 12 months' time (balance)	0,1	27,6	-51,1	1,0	-18,4	-30,8	--
B8 Own threat of unemployment now (balance)	0,8	7,6	-18,8	6,5	1,1	-4,1	-
C1 Favourability of time for purchasing durables (balance)	20,2	41,8	-14,2	14,1	8,0	7,6	--
C2 Favourability of time for saving (balance)	11,7	36,8	-19,6	18,5	14,7	12,0	+/-
C3 Favourability of time for raising a loan (balance)	17,5	42,0	-47,1	1,8	12,1	16,3	+/-
D2 Household's saving possibilities in the next 12 months (balance)	38,1	52,2	10,9	45,1	46,2	46,5	+

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 population and sample of the Consumer Survey

The population of the Consumer Survey comprises 4.4 million persons aged 15 to 84 and 2.6 million households in Finland. The population was extended to persons aged 75 to 84 starting from January 2012. The gross sample size of the Survey is monthly 2,350 persons (previously 2,200 persons).

In July, the non-response rate of the Survey was 42.2 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.

The extension of the population, that is, responses from persons aged 75 to 84, is estimated to have weakened the value of the consumer confidence indicator by one unit starting from January 2012.

EU results

The (seasonally adjusted) Consumer Survey results for all EU countries are 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 2012, July. Statistics Finland

Inquiries: Tara Junes 09 1734 3503, kuluttaja.barometri@stat.fi

Director in charge: Riitta Harala

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• 1. Method of the Consumer Survey (27.7.2012)

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Appendix tables

• Appendix table 1. Consumers' views and intentions (27.7.2012)

Figures

• Appendix figure 1. Consumer confidence indicator (CCI) (27.7.2012)
• Appendix figure 2. Micro and macro indicators (27.7.2012)
• Appendix figure 3. Own economy (27.7.2012)
• Appendix figure 4. Finland's economy (27.7.2012)
• Appendix figure 5. Inflation (27.7.2012)
• Appendix figure 6. Unemployment (27.7.2012)
• Appendix figure 7. Favourability of time for (27.7.2012)
• Appendix figure 8. Household's financial situation (27.7.2012)
• Appendix figure 9. Household's intentions to raise a loan, next 12 months (27.7.2012)
• Appendix figure10. Spending on durables, next 12 months vs last 12 months (27.7.2012)
• Appendix figure 11. Household's intentions to buy, next 12 months (27.7.2012)

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Updated 27.7.2012