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Published: 29 May 2006

Consumers' views brighter in May

Consumers' confidence in the economy strengthened in May after having weakened for a few months. In May the consumer confidence indicator stood at 13.9, while in April it was 9.4. At the same time confidence rose to the same level as one year ago and its long-term average. The data are based on Statistics Finland's Consumer Survey, for which 1,562 people resident in Finland were interviewed between 2 and 18 May.

Of the four components of the confidence indicator expectations on development of unemployment, Finland's economy and household's saving possibilities, improved in May compared with the previous month. Views on Finland's economy and especially of unemployment still remained fairly dismal. In contrast, estimates on one's own economy remained optimistic. Consumers considered saving very worthwhile in May.

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

	May 2006 balance figure	April 2006 balance figure	May 2005 balance figure	Average 10/95-5/06
Consumer confidence indicator (CCI)	13.9	9.4	14.0	13.5
CCI components:
Own economic situation in 12 months' time	11.0	11.0	11.6	9.3
Household's saving possibilities in the next 12 months	49.2	41.6	50.7	32.7
General economic situation in Finland in 12 months' time	0.2	-1.8	0.8	6.7
Unemployment in Finland in 12 months' time	-4.9	-13.3	-6.9	5.3
Others:
Inflation in 12 months' time, %	2.4	2.4	2.2	1.9
Personal threat of unemployment at present	2.9	0.9	4.7	..
Financial situation of household at present	31.6	29.4	33.6	25.0
Favourable time to make major purchases at present	22.0	24.1	26.4	20.8
Favourable time to save at present	22.3	21.2	14.3	6.2
Favourable time to raise a loan at present	26.4	26.4	35.8	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 May, 24 per cent of consumers believed that Finland's economic situation would improve in the coming twelve months, while 23 per cent of them thought that the country's economy would deteriorate. In all, 29 per cent of consumers believed in May that their own economy would improve and only 10 per cent of them feared it would worsen over the year.

Altogether 38 per cent of consumers thought in May that unemployment would increase over the year, and 32 per cent of them believed it would decrease. In April, the respective proportions were 47 and 26 per cent. Thirteen per cent of employed persons reckoned in May that their personal threat of unemployment had grown over the past few months whereas 14 per cent thought it had lessened.

Consumers predicted in May that consumer prices would go up by 2.4 per cent over the next 12 months. In last year's May, the respective predicted inflation rate was 2.2 per cent.

In May, 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 May. Sixty-six per cent of households had been able to lay aside some money and 81 per cent believed they would be able to do so during the next 12 months.

In May, 44 per cent of consumers thought the time was favourable for buying durable goods. Households had plenty of spending intentions on home decoration and home electronics, for instance. In the next twelve months, 19 per cent of households were fairly or very certain to buy a car and 9 per cent a dwelling.

The May interviews for the Consumer Survey also examined the generality of households' various technical equipment. The data will be made public on 2 June 2006.

Consumer confidence indicator 10/1995-5/2006

Consumers' expectations concerning their own and Finland's economy in 12 months' time 10/1995-5/2006

Consumer confidence indicator in EU Member States, April 2006
Deviation of indicator from country average 10/1995-4/2006*

*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, April 2006
http://europa.eu.int/comm/economy_finance/indicators/businessandconsumersurveys_en.htm

Source: Consumer Survey 2006, May. 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 29.5.2006