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Published: 29 October 2012

Consumer confidence turned negative in October

The consumer confidence indicator stood at -1.6 in October, having been 3.4 in September and 0.5 in August. Confidence in the economy was also weaker than one year ago (1.3) and clearly below the long-term average (12.7). The data are based on Statistics Finland’s Consumer Survey, for which 1,442 people resident in Finland were interviewed between 1 and 19 October.

Consumer confidence indicator (CCI)

Consumers’ expectations of their own and Finland’s economy, unemployment and their household’s saving possibilities weakened in October from September. Views especially concerning the economy in general, i.e. development on unemployment and the country’s economy were gloomy. Consumers’ estimates about the development of their own economy were in October also clearly more cautious than the long-term average.

Employed consumers also felt in October that the threat of unemployment had grown slightly. In addition, consumers thought in October that the time was more favourable for saving or raising a loan than for buying durable goods.

Consumers' own and Finland's economy

Only 16 per cent of consumers believed in October that Finland’s economic situation would improve in the coming twelve months, while 44 per cent of them thought that the country’s economy would deteriorate. In September, the respective proportions were 19 and 42 per cent and in last year’s October 15 and 48 per cent.

Good one-fifth (22%) of consumers were confident in October that their own economy would improve within the next 12 months while 16 per cent feared it would deteriorate. Both one month and one year earlier, these proportions were 23 and 14 per cent.

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

Unemployment and inflation

Eight per cent of consumers expected in October that unemployment would decrease in Finland over the next 12 months, while 71 per cent of them believed it would increase. In September the respective proportions were 12 and 58 per cent and twelve months ago 12 and 61 per cent.

In October, 10 per cent of employed persons believed that their personal threat of unemployment had lessened over the past few months, whereas around one-fifth (19%) of them thought it had grown. One-half (50%) of employed persons thought the threat of unemployment had remained unchanged and 21 per cent felt that they were not threatened by unemployment at all.

Consumers predicted in October that consumer prices would go up by 3.2 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

More than one-half (58%) of consumers regarded the time favourable for saving in October. Two out of three households (66%) had been able to lay aside some money and three out of four (77%) believed they would be able to do so during the next 12 months. Households mostly save for a rainy day. The most popular investment targets for savings are fixed-term or investment accounts, followed by investment funds and insurances.

In all, 60 per cent of households considered the time good for raising a loan in October. One year earlier, the respective proportion was under one-half of households (47%). In October, 13 per cent of households were planning to take out a loan within one year.

Buying of durable goods

Thirty-nine per cent of consumers considered the time favourable for buying durable goods in October. One-third (33%) regarded consuming as a bad idea. Despite the moderate consumption intentions, 15 per cent of households were fairly or very certain to buy a car and eight per cent a dwelling in the next twelve months. Eighteen per cent of households were planning in October to make renovations to their dwelling.

Consumers' views of the economy

	Average 10/1995-	Max. 10/1995-	Min. 10/1995-	10/2011	09/2012	10/2012	Outlook
A1 Consumer confidence indicator, CCI = (B2+B4+B7+D2)/4	12,7	22,9	-6,5	1,3	3,4	-1,6	--
B2 Own economy in 12 months' time (balance)	8,8	14,1	2,3	5,6	5,1	4,6	--
B4 Finland's economy in 12 months' time (balance)	4,0	25,3	-27,1	-19,7	-14,2	-17,0	--
B6 Inflation in 12 months' time (per cent)	2,2	4,6	0,6	3,3	3,3	3,2
B7 Unemployment in Finland in 12 months' time (balance)	-0,3	27,6	-51,1	-27,4	-25,2	-36,4	--
B8 Own threat of unemployment now (balance)	0,7	7,6	-18,8	-1,7	-2,4	-4,4	-
C1 Favourability of time for purchasing durables (balance)	20,0	41,8	-14,2	2,8	3,7	6,1	--
C2 Favourability of time for saving (balance)	11,7	36,8	-19,6	17,9	9,8	11,3	+/-
C3 Favourability of time for raising a loan (balance)	17,5	42,0	-47,1	-1,8	16,7	16,0	+/-
D2 Household's saving possibilities in the next 12 months (balance)	38,2	52,2	10,9	46,5	47,9	42,6	+

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

In October, the non-response rate of the Survey was 38.6 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 good 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, October. Statistics Finland

Inquiries: Pertti Kangassalo 09 1734 3598, Tara Junes 09 1734 3503, kuluttaja.barometri@stat.fi

Director in charge: Riitta Harala

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• 1. Method of the Consumer Survey (29.10.2012)

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Appendix tables

• Appendix table 1. Consumers' views and intentions (29.10.2012)

Figures

• Appendix figure 1. Consumer confidence indicator (CCI) (29.10.2012)
• Appendix figure 2. Micro and macro indicators (29.10.2012)
• Appendix figure 3. Own economy (29.10.2012)
• Appendix figure 4. Finland's economy (29.10.2012)
• Appendix figure 5. Inflation (29.10.2012)
• Appendix figure 6. Unemployment (29.10.2012)
• Appendix figure 7. Favourability of time for (29.10.2012)
• Appendix figure 8. Household's financial situation (29.10.2012)
• Appendix figure 9. Household's intentions to raise a loan, next 12 months (29.10.2012)
• Appendix figure10. Spending on durables, next 12 months vs last 12 months (29.10.2012)
• Appendix figure 11. Household's intentions to buy, next 12 months (29.10.2012)

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Updated 29.10.2012