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Published: 27 December 2005

Consumers' views on unemployment improved in December

Consumer sentiments have recovered from the drops in the summer and autumn to the level of the early part of the year. The consumer confidence indicator stood at 16.1 in December, while one month and year ago it was 14.6. At the same time the confidence indicator was higher than its long-term average. The data are based on Statistics Finland's Consumer Survey for which 1,577 persons resident in Finland were interviewed between 1 and 16 December.

Of the four components of the confidence indicator views on the development of unemployment improved clearly in December. For the first time since spring 2002 there were more believing that unemployment would decrease than those thinking it would grow. The other components of the confidence indicator remained more or less unchanged, and consumers' expectations of Finland's economy were still dull.

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

		December 2005 balance figure		November 2005 balance figure		December 2004 balance figure		Average 10/95-12/05
Consumer confidence indicator		16.1		14.6		14.6		13.5
Own economic situation in 12 months' time		11.3		11.8		12.1		9.2
Household's saving possibilities in the next 12 months		48.2		47.5		47.0		32.1
General economic situation in Finland in 12 months' time		1.4		1.4		6.2		6.9
Unemployment in Finland in 12 months' time		3.6		-2.2		-6.8		5.7
Inflation in 12 months' time, %		2.3		2.3		1.9		1.9
Personal threat of unemployment at present		4.2		4.8		1.2		..
Financial situation of household at present		32.9		29.9		29.8		24.8
Favourable time to make major purchases at present		14.4		19.4		16.9		20.7
Favourable time to save at present		15.5		13.9		14.8		5.7
Favourable time to raise a loan at present		27.3		31.1		29.1		23.1
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 December, 24 per cent of consumers believed that Finland's economic situation would improve in the coming twelve months. Twenty per cent of consumers thought that the country's economy would deteriorate. In all, 30 per cent of consumers believed in December that their own economy would improve and only 11 per cent of them feared it would worsen over the year.

Altogether 28 per cent of consumers thought in December that unemployment would increase over the year, and 37 per cent of them believed it would decrease. The corresponding proportions were 35 and 32 per cent in November and 37 and 25 per cent one year previously. Thirteen 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 December that consumer prices would go up by 2.3 per cent over the next 12 months. One year ago that inflation expectation was 1.9 per cent.

In December, 42 per cent of consumers thought the time was favourable for buying durable goods. Households still had plenty of spending intentions on travel, home repairs and home furnishing and on purchasing entertainment electronics and leisure equipment. Twenty-four per cent of households were thinking of buying a digital set-top box by next summer. In the next 12 months 17 per cent of households were either fairly or very certain to buy a car and 8 per cent a dwelling.

In December 71 per cent of consumers thought the time was good for raising a loan, and 14 per cent of households were planning to do so in the next 12 months. Saving was considered worthwhile by 63 per cent of consumers in December. In all, 66 per cent of households had been able to lay aside some money and as many as 81 per cent believed they would be able to do so during the next 12 months.

Consumer confidence indicator 10/1995-12/2005

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

Consumer confidence indicator in EU Member States, November 2005
Deviation of indicator from country average 10/1995-11/2005*

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

Source: Consumer Survey 2005, December. Statistics Finland

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

Director in charge: Mr Ari Tyrkkö

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Last updated 27.12.2005