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Published: 27 August 2007

Consumers confident about saving and the decrease of unemployment

Consumers' confidence in the economy reached almost its record high level of February 2000 in August. The consumer confidence indicator stood at 20.3 in August, whereas in July it was 18.5 and twelve months earlier 14.4. The data are based on Statistics Finland's Consumer Survey, for which 1,535 people resident in Finland were interviewed between 1 and 17 August.

Of the four components of the consumer confidence indicator, expectations on saving possibilities strengthened in August from the month before and were higher than even before. Other components of the consumer confidence indicator remained essentially unchanged in August. Consumers' confidence in their own economy was strong but their expectations on Finland's economy weakened further. By contrast, confidence in the decrease of unemployment became more and more widespread. Consumers regarded saving more worthwhile than ever in August but their respective views about raising a loan faded further. Moreover, they reckoned that inflation would accelerate.

Consumer views on the economic and financial conditions in Finland in August 2007, balances*

	Average 10/95-8/07	Max. 10/95-8/07	Min. 10/95-8/07	August 2006	July 2007	August 2007	Situation***
Consumer confidence indicator (CCI)	13.9	21.8	3.5	14.4	18.5	20.3	++
CCI components:
Own economic situation in 12 months' time	9.5	14.1	2.3	8.2	11.4	11.7	+
Households' saving possibilities in the next 12 months	34.2	52.0	10.9	46.6	45.1	52.0	++
Finland's economic situation in 12 months time	6.3	21.7	-14.0	-0.2	2.6	1.5	-
Finland's unemployment situation in 12 months time	5.6	27.6	-22.7	3.0	14.8	16.1	+
Others:
Inflation in 12 months' time, per cent	2.0	3.1	0.7	2.8	2.6	2.8
Own threat of unemployment at present**	4.1	7.2	0.8	4.6	6.1	7.2	++
Financial situation of household at present	25.8	35.1	14.7	32.3	32.5	34.0	++
Favourable time to make major purchases at present	21.0	37.7	-2.1	23.1	22.3	18.3	-
Favourable time to save at present	8.6	35.1	-19.6	20.3	33.7	35.1	++
Favourable time to raise a loan at present	22.1	42.0	-13.5	16.2	3.7	0.7	- -
* 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 the CCI components. 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. ** Own threat of unemployment has only been asked since March 2004. *** ++ Situation is very good, + Situation is good, - Situation is bad, - - Situation is very bad.

In August, 25 per cent of consumers believed that Finland's economic situation would improve in the coming twelve months, while 21 per cent of them thought that the country's economy would deteriorate. In all, 31 per cent of consumers believed in August that their own economy would improve and only 11 per cent of them feared it would worsen over the year.

Altogether 49 per cent of consumers thought in August that unemployment would decrease over the coming year, while 18 per cent of them believed it would increase. One year ago, the corresponding proportions were 35 and 28 per cent. Fifteen per cent of employed persons reckoned in August that their personal threat of unemployment had lessened over the past few months, while 8 per cent thought it had grown.

Consumers predicted in August that consumer prices would go up by 2.8 per cent over the next 12 months. The long-term predicted average inflation rate is 2.0 per cent.

Saving was considered worthwhile by a record 79 per cent of consumers in August. Twelve months earlier the corresponding percentage was 67. Sixty-eight per cent of households had been able to lay aside some money and as many as 82 per cent believed they would be able to do so during the next 12 months.

In August, only 50 per cent of consumers regarded the time favourable for raising a loan. One year ago the respective proportion was 63 per cent. Twelve per cent of households were planning to raise a loan within one year.

In August, 44 per cent of consumers thought the time was favourable for buying durable goods. Many households intended to spend money on, for instance, home furnishings and home technology. 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.

Consumer confidence indicator 10/1995-8/2007

Consumers' expectations concerning their own and Finland's economy in 12 months' time
10/1995-8/2007

Consumer confidence indicator in EU member states, July 2007
Deviation of indicator from country average 10/1995 - 7/2007*

*Calculated from seasonally adjusted series.
Source: European Commission, DG ECFIN, Business and Consumer Survey Results, July 2007
http://europa.eu.int/comm/economy_finance/indicators/businessandconsumersurveys_en.htm

Source: Consumer Survey 2007, August. Statistics Finland

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

Director in charge: Ari Tyrkkö

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Last updated 27.8.2007