Home > Statistics > Consumer Confidence > 2008 > January > Consumer confidence weakening slowly

Published: 28 January 2008

Consumer confidence weakening slowly

Consumers' confidence in the economy has been waning gradually since summer 2007. In January, confidence in the economy was already slightly weaker than the long-term average. The consumer confidence indicator stood at 13.1 in January, having been 14.0 in December and 20.3 in August 2007. The data are based on Statistics Finland's Consumer Survey, for which 1,534 people resident in Finland were interviewed between 2 and 18 January.

Of the four components of the consumer confidence indicator, expectations concerning the development of unemployment weakened in January from the previous month. The other components showed only minor changes. Consumers' views concerning their saving possibilities continued to be bright, even though their views concerning their own economy were more cautious than before. Finland's economic growth was estimated to slow down in the near future. Consumers predicted in January also that inflation would speed up clearly over the next 12 months. Buying durable goods was regarded as especially worthwhile in January.

Consumer views on the economic and financial conditions in Finland in January 2008, balances*

	Average 10/95-	Max. 10/95-	Min. 10/95-	January 2007	December 2007	January 2008	Situation***
Consumer confidence indicator (CCI)	13.9	21.8	3.5	18.3	14.0	13.1	-
CCI components:
Own economic situation in 12 months' time	9.5	14.1	2.3	12.3	10.4	9.7	+
Households' saving possibilities in the next 12 months	34.8	52.0	10.9	47.0	49.0	48.4	++
Finland's economic situation in 12 months time	5.8	21.7	-14.0	4.3	-8.7	-8.2	- -
Finland's unemployment situation in 12 months time	5.6	27.6	-22.7	9.6	5.3	2.6	-
Others:
Inflation in 12 months' time, per cent	2.0	3.8	0.7	2.4	3.4	3.8
Own threat of unemployment at present**	4.2	7.6	0.8	5.1	4.4	7.6	++
Financial situation of household at present	26.0	35.1	14.7	32.6	33.3	34.3	++
Favourable time to make major purchases at present	20.8	37.7	-2.1	28.1	13.7	32.6	++
Favourable time to save at present	9.5	36.8	-19.6	28.7	35.1	32.6	++
Favourable time to raise a loan at present	21.2	42.0	-13.5	12.4	-6.5	-3.0	- -
* 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 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 January 18 per cent of consumers believed that Finland's economic situation would improve in the coming twelve months, while 33 per cent of them thought that the country's economy would deteriorate. Twelve months earlier the corresponding proportions were 26 and 17 per cent. In all, 29 per cent of consumers believed in January that their own economy would improve and 13 per cent of them feared it would worsen over the year. One year ago the corresponding proportions were 32 and 10 per cent.

Altogether 35 per cent of consumers thought in January that unemployment would decrease over the year, while 29 per cent of them believed it would increase. Twelve months earlier the corresponding proportions were 43 and 24 per cent. Seventeen per cent of employed persons reckoned in January that their personal threat of unemployment had lessened over the past few months, while 9 per cent thought it had grown. Confidence in own employment improved slightly, as in December the corresponding proportions were 14 and 11 per cent.

In January consumers predicted that consumer prices would go up by 3.8 per cent over the next 12 months. This was again the highest prediction for the period 1995 to 2007. The long-term predicted average inflation rate is 2.0 per cent.

Altogether 77 per cent of consumers considered saving worthwhile in January. Twelve months earlier the corresponding percentage was 73. Sixty-nine per cent of households had been able to lay aside some money and 80 per cent believed they would be able to do so during the next 12 months. Households mostly save for a rainy day or for a holiday trip. The most popular investment targets after bank accounts are mutual funds.

In January 46 per cent of consumers regarded the time good for raising a loan. The respective proportion was 60 per cent twelve months before. However, as many households as before, or 13 per cent, were planning to take out a loan within one year.

In January notably many consumers, or 53 per cent, thought the time was favourable for buying durable goods. One month ago the respective proportion was 44 per cent and one year ago 48 per cent. In January, many households had intentions to spend money on, for instance, home furnishings during the next six months. Twenty-two per cent of households considered purchasing a digital set-top box. In the next twelve months, 19 per cent of households were fairly or very certain to buy a car and 7 per cent a dwelling.

 

Consumer confidence indicator (CCI) 10/1995-1/2008

Consumers' micro and macro indicators 10/1995-1/2008*

* Micro indicator is the average of three balances: own economy and household's saving possibilities in 12 months' time,
and household's financial situation at present.
Macro indicator is the average of two balance figures: Finland's economy and unemployment in 12 months' time.

Deviation of CCI from country average in EU member states, December 2007
(average: 10/1995-)*

*Calculated from seasonally adjusted series.
Source: European Commission, DG ECFIN, Business and Consumer Survey Results, December 2007
http://ec.europa.eu/economy_finance/db_indicators/db_indicators8650_en.htm

Source: Consumer Survey 2008, January. 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 28.1.2008