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Published: 27 December 2011

Consumers' confidence in the economy fading

The consumer confidence indicator stood at 0.4 in December whereas in November it was 1.5 and in October 1.3. The confidence indicator fell by around twenty units from late winter to the end of this year. In last year’s December the consumer confidence indicator received the value 13.5. The long-term average for the confidence indicator is 13.0. The data are based on Statistics Finland’s Consumer Survey, for which 1,392 people resident in Finland were interviewed between 1 and 16 December.

Consumer confidence indicator

Of the four components of the consumer confidence indicator, only views concerning own saving possibilities improved slightly in December from the previous month. The other components weakened to some degree. Consumers' expectations concerning general economic development, i.e. Finland's economy and unemployment, were ever gloomier in December. Consumers' views on their own economy were also weak.

In December, employed consumers also felt personally more threatened by unemployment than before. In addition, consumers considered saving in December clearly more worthwhile than purchasing of durable goods or raising a loan, in particular.

In December, only 14 per cent of consumers believed that Finland’s economic situation would improve in the coming twelve months, while clearly more than one half, or 51 per cent, of them thought that the country’s economy would deteriorate. In last year’s December the corresponding proportions were 32 and 26 per cent. In all, 22 per cent of consumers believed in December that their own economy would improve and 14 per cent of them feared it would worsen over the year. One year ago the respective proportions were 29 and 13 per cent.

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

Only 11 per cent of consumers thought in December that unemployment would decrease in Finland over the next year, while 63 per cent of them believed it would increase. Twelve months earlier the corresponding proportions were 26 and 35 per cent.

In December, nine per cent of employed persons reckoned that their personal threat of unemployment had decreased over the past few months but clearly more, or 22 per cent, of them thought it had grown. These proportions were 13 and 16 per cent in November and 16 and 14 per cent one year ago. In December, 49 per cent of employed persons thought the threat had remained unchanged and 20 per cent felt that they were not threatened by unemployment at all.

Consumers predicted in December that consumer prices would go up by 3.1 per cent over the next 12 months. The long-term predicted average inflation rate is 2.2 per cent.

In December, 65 per cent of consumers considered the time favourable for saving. Sixty-six per cent of households had been able to lay aside some money and as many as 81 per cent believed they would be able to do so during the next 12 months.

In December, 40 per cent of consumers regarded the time favourable for raising a loan. One month ago the respective proportion was 46 per cent and one year ago 65 per cent. Slightly fewer households than before, or 12 per cent of them, were planning in December to raise a loan within one year.

In December, 37 per cent of consumers thought that the time was favourable for buying durable goods. Twelve months ago the respective proportion was 45 per cent. Consumption intentions were more moderate than usual in December, but many households had plans to spend money on, for instance, purchases of entertainment electronics during the next six months. Fifteen per cent of households were fairly or very certain to buy a car and seven per cent a dwelling during the next 12 months. In last year’s December the corresponding proportions were 16 and 10 per cent.

The population of the Consumer Survey comprises approximately 4.1 million persons and 2.5 million households in Finland. The size of the sample of the Consumer Survey is 2,200 persons monthly. In December, the non-response rate of the Survey was 36.7 per cent. The non-response rate includes those who refused from the survey or were otherwise prevented from participating as well as those who could not be contacted.

Consumers' views of the economy

	Average 10/1995-	Max. 10/1995-	Min. 10/1995-	12/2010	11/2011	12/2011	Outlook
A1 Consumer confidence indicator, CCI = (B2+B4+B7+D2)/4	13,0	22,9	-6,5	13,5	1,5	0,4	--
B2 Own economy in 12 months' time (balance)	9,0	14,1	2,3	9,3	5,4	4,6	--
B4 Finland's economy in 12 months' time (balance)	4,6	25,3	-27,1	1,7	-18,9	-22,0	--
B6 Inflation in 12 months' time (per cent)	2,2	4,6	0,6	3,0	3,2	3,1
B7 Unemployment in Finland in 12 months' time (balance)	0,8	27,6	-51,1	-5,8	-26,7	-29,9	--
B8 Own threat of unemployment now (balance)	1,0	7,6	-18,8	1,9	-1,3	-6,9	--
C1 Favourability of time for buying durable goods (balance)	20,6	41,8	-14,2	17,9	1,7	-0,0	--
C2 Favourability of time for saving (balance)	11,6	36,8	-19,6	17,7	19,5	20,1	+
C3 Favourability of time for raising a loan (balance)	17,7	42,0	-47,1	19,6	-3,4	-10,7	--
D2 Household's saving possibilities in the next 12 months (balance)	37,8	52,2	10,9	48,8	46,4	48,9	+

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 (positive) 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 2011, December. Statistics Finland

Inquiries: Pertti Kangassalo (09) 1734 3598, Tara Junes (09) 1734 3484, kuluttaja.barometri@stat.fi

Director in charge: Ari Tyrkkö

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• 1. Method of the Consumer Survey (27.12.2011)

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Appendix tables

• Appendix table 1. Consumers' views and intentions (27.12.2011)

Figures

• Appendix figure 1. Consumer confidence indicator (CCI) (27.12.2011)
• Appendix figure 2. Micro and macro indicators (27.12.2011)
• Appendix figure 3. Own economy (27.12.2011)
• Appendix figure 4. Finland's economy (27.12.2011)
• Appendix figure 5. Inflation (27.12.2011)
• Appendix figure 6. Unemployment (27.12.2011)
• Appendix figure 7. Favourability of time for (27.12.2011)
• Appendix figure 8. Household's financial situation (27.12.2011)
• Appendix figure 9. Intentions to raise a loan, next 12 months (27.12.2011)
• Appendix figure10. Spending on durable goods, next 12 months vs last 12 months (27.12.2011)
• Appendix figure 11. Intentions to buy, next 12 months (27.12.2011)

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Updated 27.12.2011