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Published: 27 July 2010

Consumers' views of the economy sunny in July

Consumers’ confidence in the economy continued strong in July. The consumer confidence indicator stood at 19.1 in July, while it was 18.7 in June and 15.8 in May. In July confidence in the economy was also clearly better than the long-term average and the strongest in three years. The data are based on Statistics Finland’s Consumer Survey, for which 1,263 people resident in Finland were interviewed between 1 and 19 July.

Consumer confidence indicator

Of the four components of the consumer confidence indicator, expectations concerning development of unemployment and Finland’s economic situation improved further in July compared with the previous month. Consumers’ views about their own economy and saving possibilities in the coming months weakened slightly, but were still bright. Personal threat of unemployment experienced by employed persons declined in July.

In July as many as 51 per cent of consumers believed that Finland’s economic situation would improve in the coming twelve months, while only 10 per cent of them thought that the country’s economy would deteriorate. The corresponding proportions were 47 and 17 per cent in June and 46 and 21 per cent one year ago. In all, 26 per cent of consumers believed in July that their own economy would improve while 11 per cent of them feared it would worsen over the year.

Consumers' expectations concerning their own and Finland's economy in 12 months' time

Altogether 35 per cent of consumers thought in July that unemployment would decrease in Finland over the year, while 24 per cent of them believed it would increase. The corresponding proportions were 30 and 30 per cent in June and gloomy 14 and 62 per cent one year ago.

In July 19 per cent of employed persons believed that their personal threat of unemployment had lessened over the past few months, whereas 15 per cent thought it had grown. The corresponding proportions were 13 and 18 per cent in June and gloomy seven and 30 per cent one year ago. In July, 42 per cent of employed persons thought the threat had remained unchanged and 23 per cent felt that they were not threatened by unemployment at all.

Consumers predicted in July that consumer prices would go up by 2.2 per cent over the next 12 months. The long-term predicted average inflation rate is 2.1 per cent.

Saving was considered worthwhile by 63 per cent of consumers in July. One year previously the corresponding proportion was 56 per cent. Sixty-four per cent of households had been able to lay aside some money and 75 per cent believed they would be able to do so during the next 12 months. Households mostly save for a rainy day. After the popular fixed-term or investment accounts, the most common investment targets are insurances and investment funds.

In July, 68 per cent of consumers regarded the time good for raising a loan. Slightly fewer households than before, or 10 per cent of them, were planning in July to raise a loan within one year.

In July, 50 per cent of consumers thought the time was favourable for buying durable goods. Twelve months earlier the corresponding percentage was 62. Consumption intentions were mostly moderate in July, but many households had plans to spend money on, for instance, travel or buying of hobby equipment during the next six months. Sixteen per cent of households were fairly or very certain to buy a car and six per cent a dwelling during the next 12 months. In July 2009 the corresponding proportions were 19 and seven per cent.

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

	Average 10/1995-	Max. 10/1995-	Min. 10/1995-	07/2009	06/2010	07/2010	Outlook
Consumer confidence indicator, CCI = (B2+B4+B7+D2)/4	13,1	21,8	-6,5	8,4	18,7	19,1	+
Own economy in 12 months' time (balance)	9,1	14,1	2,3	7,1	10,0	9,2	+/-
Household's saving possibilities in the next 12 months (balance)	36,8	52,0	10,9	43,4	50,5	40,5	+/-
Finland's economy in 12 months' time (balance)	4,9	24,2	-27,1	11,7	15,1	21,5	++
Unemployment in Finland in 12 months' time (balance)	1,3	27,6	-51,1	-28,6	-1,0	5,2	+/-
Inflation in 12 months' time (per cent)	2,1	4,6	0,6	1,6	2,2	2,2	+/-
Favourability of time for buying durable goods (balance)	21,1	41,8	-14,2	41,8	29,7	25,9	+/-
Favourability of time for saving (balance)	10,9	36,8	-19,6	8,9	18,4	17,2	+/-
Favourability of time for raising a loan (balance)	18,4	42,0	-47,1	19,8	26,2	23,4	+/-

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 - the higher the balance figure, the brighter the view on the economy.

Explanations for Outlook column:

++ Outlook is very good, + Outlook is good, +/- Outlook is neutral, - Outlook is poor,-- Outlook is very poor. Deviation of balance from average has been compared to standard deviation.

The (seasonally adjusted) Consumer Survey results for all EU countries will be later released on the European Commission website: European Commission, DG ECFIN, Business and Consumer Survey Results; http://ec.europa.eu/economy_finance/db_indicators/surveys/index_en.htm

Source: Consumer Survey 2010, July. Statistics Finland

Inquiries: Pertti Kangassalo (09) 1734 3598, kuluttaja.barometri@stat.fi

Director in charge: Ari Tyrkkö

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Reviews

• 1. Overview of the past (27.7.2010)
• 2. Method of the Consumer Survey (27.7.2010)

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Appendix tables

• Appendix table 1. Consumer views on the economic and financial conditions in Finland (27.7.2010)

Figures

• Appendix figure 1. Consumer confidence indicator (CCI) (27.7.2010)
• Appendix figure 2. Micro and macro indicators (27.7.2010)
• Appendix figure 3. Own economy (27.7.2010)
• Appendix figure 4. Finland's economy (27.7.2010)
• Appendix figure 5. Inflation (27.7.2010)
• Appendix figure 6. Unemployment (27.7.2010)
• Appendix figure 7. Favourability of time for (27.7.2010)
• Appendix figure 8. Household's financial situation (27.7.2010)
• Appendix figure 9. Intentions to raise a loan, next 12 months (27.7.2010)
• Appendix figure 10. Spending on durable goods, next 12 months vs last 12 months (27.7.2010)
• Appendix figure 11. Intentions to buy, next 12 months (27.7.2010)

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Updated 27.7.2010