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Published: 27 October 2005

Consumers' moods improved in October

Consumers' confidence in the economy has recovered from the downturn it took in September. The consumer confidence indicator stood at 14.0 in October, having been 10.8 in September and 9.6 one year ago. At the same time the consumer confidence indicator rose back to its long-term average level. The data are based on Statistics Finland's Consumer Survey for which 1,543 persons resident in Finland were interviewed between 3 and 19 October.

Of the four components of the confidence indicator, expectations concerning own economy, Finland's economy and unemployment improved in October from September. However, consumers' views about general economy remained cautious. Expectations concerning own household's saving possibilities were unchanged and ran high.

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

		October 2005 balance figure		September 2005 balance figure		October 2004 balance figure		Average 10/95-10/05
Consumer confidence indicator		14.0		10.8		9.6		13.5
Own economic situation in 12 months' time		11.5		9.3		12.7		9.2
Household's saving possibilities in the next 12 months		44.3		44.1		37.6		31.9
General economic situation in Finland in 12 months' time		2.8		-2.3		2.8		7.0
Unemployment in Finland in 12 months' time		-2.6		-7.8		-14.7		5.8
Inflation in 12 months' time, %		2.3		2.6		2.0		1.9
Personal threat of unemployment at present		2.6		3.3		2.5		..
Financial situation of household at present		30.3		27.8		27.0		24.7
Favourable time to make major purchases at present		25.3		19.6		21.8		20.7
Favourable time to save at present		19.7		12.5		14.5		5.5
Favourable time to raise a loan at present		33.3		33.0		25.6		23.0
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 October, 27 per cent of consumers believed that Finland's economic situation would improve in the coming twelve months, whereas 21 per cent of them thought that the country's economy would deteriorate. In September, the respective proportions were 25 and 28 per cent. In all, 30 per cent of consumers believed in October that their own economy would improve and 11 per cent of them feared it would worsen over the year.

Altogether 35 per cent of consumers thought in October that unemployment would increase over the coming year, and 33 per cent of them believed it would decrease. In September, the corresponding proportions were 41 and 28 per cent, and one year ago 46 and 19 per cent. In October, 14 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. 15 per cent thought it had lessened.

Consumers predicted in October that consumer prices would go up by 2.3 per cent over the next 12 months. The respective expectation was 2.6 per cent in September and 2.0 per cent one year ago.

In October, 47 per cent of consumers thought the time was favourable for buying durable goods. One month previously, the corresponding proportion was 44 per cent. Households had plenty of spending intentions on home furnishings, home electronics and hobby equipment, as well as on travel. Even major purchases were of interest in October, for 19 per cent of households were either fairly or very certain to buy a car and 10 per cent a dwelling within the next 12 months.

Seventy-seven per cent of consumers thought in October that the time was good for raising a loan, and 16 per cent of households were planning to do so in the next 12 months. Saving was considered worthwhile by 66 per cent of consumers in October. In all, 64 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.

Consumer confidence indicator 10/1995-10/2005

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

Consumer confidence indicator in EU Member States, September 2005
Deviation of indicator from country average 10/1995-9/2005*

*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, September 2005. http://europa.eu.int/comm/economy_finance/indicators/businessandconsumersurveys_en.htm

Source: Consumer Survey 2005, October. Statistics Finland

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

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Last updated 27.10.2005