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Published: 27 April 2006

Declining trend in consumer confidence continued in April

The consumer confidence indicator, condensing economic views in Finland, stood at 9.4 in April. In March, it was still 12.6 and in February as high as 17.0. The average figure for the confidence indicator in the years after the economic recession of the early 1990s is 13.5. The data are based on Statistics Finland's Consumer Survey for which 1,514 persons resident in Finland were interviewed between 3 and 20 April.

However, the only one of the four components of the confidence indicator in which views weakened clearly in April from the previous month was own household's saving possibilities. Nevertheless, consumers still regarded their saving possibilities as excellent. Otherwise, too, consumers' expectations concerning their own economic situation remained bright, and many considered purchasing a dwelling, for example. By contrast, views concerning Finland's economy and especially the development of unemployment continued to grow slightly gloomier.

Consumer views on the economic and financial conditions in Finland in April 2006

	April 2006 balance figure	March 2006 balance figure	April 2005 balance figure	Average 10/95-4/06
Consumer confidence indicator (CCI)	9.4	12.6	13.5	13.5
CCI components:
Own economic situation in 12 months' time	11.0	11.3	11.9	9.3
Household's saving possibilities in the next 12 months	41.6	50.9	40.2	32.6
General economic situation in Finland in 12 months' time	-1.8	-0.1	4.4	6.8
Unemployment in Finland in 12 months' time	-13.3	-11.8	-2.5	5.4
Others:
Inflation in 12 months' time, %	2.4	2.2	2.1	1.9
Personal threat of unemployment at present	0.9	3.7	6.0	..
Financial situation of household at present	29.4	32.1	31.4	25.0
Favourable time to make major purchases at present	24.1	24.7	26.4	20.8
Favourable time to save at present	21.2	18.1	17.9	6.1
Favourable time to raise a loan at present	26.4	23.9	33.0	23.2
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 April, 24 per cent of consumers believed that Finland's economic situation would improve in the coming twelve months, while 26 per cent of them thought that the country's economy would deteriorate. Twelve months previously, the corresponding proportions were 27 and 18 per cent. In all, 30 per cent of consumers believed in April that their own economy would improve and only 11 per cent of them feared it would worsen over the year.

Altogether 47 per cent of consumers thought in April that unemployment would increase over the year, and 26 per cent of them believed it would decrease. One year before, the corresponding proportions were 33 and 29 per cent. Sixteen per cent of employed persons reckoned in April that their personal threat of unemployment had grown over the past few months whereas 14 per cent thought it had lessened.

Consumers predicted in April that consumer prices would go up by 2.4 per cent over the next 12 months. In last year's April, the respective predicted inflation rate was 2.1.

In April, 72 per cent of consumers thought the time was good for raising a loan and 14 per cent of households were planning to take out a loan in the next 12 months. Saving was considered worthwhile by 67 per cent of consumers in April. Sixty-two per cent of households had been able to lay aside some money and 76 per cent believed they would be able to do so during the next 12 months. In March, the respective proportions were 65 and 81 per cent.

In April, 46 per cent of consumers thought the time was favourable for buying durable goods. Households had plenty of spending intentions on, for example, entertainment electronics. In the next twelve months, 19 per cent of households were fairly or very certain to buy a car and 11 per cent a dwelling. Intentions to buy a dwelling increased again after the downswing in March.

Consumer confidence indicator 10/1995-4/2006

Consumers' expectations concerning their own and Finland's economy in 12 months' time 10/1995-4/2006

Consumer confidence indicator in EU Member States, March 2006
Deviation of indicator from country average 10/1995-3/2006*

*Calculated from seasonally adjusted series. Data for France are indicative due to break in time series.
Averages for a shorter time period: Malta 11/2002 -, Luxembourg 1/2002 -, Cyprus, Lithuania and Poland 1/2001 -, Slovakia 4/1999 -.
Source: European Commission, DG ECFIN, Business and Consumer Survey Results, March 2006. http://europa.eu.int/comm/economy_finance/indicators/businessandconsumersurveys_en.htm

Source: Consumer Survey 2006, April. 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 27.4.2006