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Published: 27 July 2005

Consumer confidence strengthened slightly in July

Consumers' confidence in the economy has recovered slightly from the drop in June. The consumer confidence indicator stood at 10.3 in July, having been 8.8 in June. However, confidence in the economy was slightly weaker than one year before and below its long-term average. The data are based on Statistics Finland's Consumer Survey for which 1,558 persons resident in Finland were interviewed between 1 and 19 July.

Compared with the previous month, of the four components of the confidence indicator only the estimate of households' saving possibilities weakened in July. However, the estimate was still very optimistic and belief in one's own economy strengthened in general. In contrast, views on Finland's economy and especially on development of unemployment remained pessimistic. In July consumers considered the time very favourable for buying consumer durables and raising a loan.

Consumer views on the economic and financial conditions in Finland in July 2005

		July 2005 balance figure		June 2005 balance figure		July 2004 balance figure		Average 10/95-7/05
Consumer confidence indicator		10.3		8.8		11.4		13.5
Own economic situation in 12 months' time		11.6		9.9		9.9		9.1
Household's saving possibilities in the next 12 months		42.0		46.5		40.8		31.5
General economic situation in Finland in 12 months' time		-0.7		-6.4		5.6		7.2
Unemployment in 12 months' time		-11.9		-14.6		-10.6		6.1
Inflation in 12 months' time, %		2.3		2.2		2.0		1.9
Personal threat of unemployment at present		2.7		2.7		5.1		..
Financial situation of household at present		33.3		30.0		29.7		24.5
Favourable time to make major purchases at present		31.3		22.8		33.7		20.6
Favourable time to save at present		12.6		14.9		11.1		5.3
Favourable time to raise a loan at present		36.7		31.8		28.8		22.7
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 four questions concerning the next 12 months: own and Finland's economy, unemployment and household's saving possibilities. The balance figures and the confidence indicator can range between -100 and 100. A positive balance figure denotes an optimistic and a negative balance figure a pessimistic view on the economy.

In July, 24 per cent of consumers believed that Finland's economic situation would improve in the coming twelve months. An equal proportion of consumers thought that the country's economy would deteriorate. The respective proportions were 20 and 31 per cent in June and 29 and 18 per cent one year ago. In all, 31 per cent of consumers believed in July that their own economy would improve and only 10 per cent of them feared it would worsen over the year.

Altogether 43 per cent of consumers thought in July that unemployment would increase over the year and 22 per cent of them believed it would decrease. Twelve per cent of employed persons reckoned that their personal threat of unemployment had grown over the past few months but slightly more of them, i.e. 14 per cent thought it had lessened. Consumers predicted that consumer prices would go up by 2.3 per cent over the next 12 months.

In July, 76 per cent of consumers thought the time was favourable for raising a loan, and 13 per cent of households were planning to do so in the next 12 months. Saving was considered worthwhile by 60 per cent of consumers in July. In all, 65 per cent of households had been able to lay aside some money and 75 per cent believed they would be able to do so during the next 12 months. Investment in funds increased its popularity among households.

In July, 52 per cent of consumers thought the time was favourable for buying durable goods. The corresponding proportion was 46 per cent one month previously. Households had plenty of intentions to purchase entertainment electronics and leisure equipment, for example. Eighteen per cent of households were either fairly or very certain to buy a car and 7 per cent a dwelling within the next 12 months.

Consumer confidence indicator 10/1995-7/2005

Consumers' expectations concerning their own and Finland's economy in 12 months' time 10/1995-7/2005

Consumer confidence indicator in EU Member States, June 2005
Deviation of indicator from country average 10/1995-6/2005*

*Calculated from seasonally adjusted series. Malta does not release a consumer survey. Data for France are missing due to break in time series. Averages for a shorter time period: Luxembourg 1/2002 -, Cyprus, Lithuania and Poland: 1/2001 -, Slovakia: 4/1999 -.
Source: European Commission, DG ECFIN, Business and Consumer Survey Results, June 2005. http://europa.eu.int/comm/economy_finance/indicators/businessandconsumersurveys_en.htm

Source: Consumer Survey 2005, July. Statistics Finland

Inquiries: Mr Pertti Kangassalo +358 9 1734 3598, kuluttaja.barometri@stat.fi

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Last updated 27.7.2005