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Published: 27 May 2013

Consumers predict unemployment to grow

Consumers’ confidence in the economy has still weakened slightly. In May, the consumer confidence indicator stood at 5.0, while in April it was 6.4 and in March 10.2. Confidence in the economy was clearly weaker than one year ago in May (12.0) and when compared with the long-term average (12.4). The data are based on Statistics Finland’s Consumer Survey, for which 1,403 persons resident in Finland were interviewed between 2 and 17 May.

Consumer confidence indicator (CCI)

Of the four components of the consumer confidence indicator, only views of own saving possibilities improved in May from the previous month. The other components weakened to some degree. Expectations concerning one's own economy were cautious in May and assessments about the economy in general, or Finland's economy and especially about the development of unemployment were gloomy.

In addition, consumers thought in May that the time was clearly more favourable for raising a loan than for saving or buying durable goods. In May, employed consumers felt personally somewhat more threatened by unemployment than before.

Consumers' own and Finland's economy

Twenty-eight per cent of consumers believed in May that Finland’s economic situation would improve in the coming twelve months, while slightly more, or 31 per cent, of them thought that the country’s economy would deteriorate. In last year’s May, the corresponding proportions were 32 and 25 per cent.

In all, 23 per cent of consumers believed in May that their own economy would improve and 15 per cent of them feared it would worsen over the year.

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

Unemployment and inflation

Just 12 per cent of consumers expected in May that general unemployment would decrease in Finland over the next 12 months, while 59 per cent of them believed it would increase. In April, the respective proportions were 17 and 51 per cent and twelve months ago 21 and 40 per cent.

In May, ten per cent of employed persons believed that their personal threat of unemployment had lessened over the past few months, whereas 21 per cent thought it had grown. The corresponding proportions were 11 and 18 per cent one month earlier and 12 and 16 per cent one year ago. In May, still nearly one-half (44%) of employed persons thought the threat of unemployment had remained unchanged and one-quarter (24%) felt that they were not threatened by unemployment at all.

Consumers estimated in May 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.

Buying of durable goods

Thirty-six per cent of consumers considered the time favourable for buying durable goods in May. Almost as many of them, or 37 per cent, thought it was not a good time for consuming. Different consumption intentions were moderate in May. Fifteen per cent of households were fairly or very certain to buy a car and eight per cent a dwelling in the next twelve months. In May, 21 per cent of households were planning to make renovations to their dwelling.

Saving and taking out a loan

In May, only under one-half, or 49 per cent, of consumers regarded the time favourable for saving. In April, the respective proportion was 53 per cent and one year ago 61 per cent of all consumers. Two out of three households (65%) had been able to lay aside some money and three out of four (77%) believed they would be able to do so during the next 12 months.

In May, 64 per cent of consumers regarded the time good for raising a loan. Thirteen per cent of households were planning to take out a loan within one year.

Consumers' views of the economy

	Average 10/1995-	Max. 10/1995-	Min. 10/1995-	05/2012	04/2013	05/2013	Outlook
A1 Consumer confidence indicator, CCI = (B2+B4+B7+D2)/4	12,4	22,9	-6,5	12,0	6,4	5,0	--
B2 Own economy in 12 months' time (balance)	8,7	14,1	2,3	7,2	5,6	5,1	--
B4 Finland's economy in 12 months' time (balance)	3,7	25,3	-27,1	3,0	-1,6	-3,2	-
B6 Inflation in 12 months' time (per cent)	2,2	4,6	0,6	3,1	3,2	3,1
B7 Unemployment in Finland in 12 months' time (balance)	-1,1	27,6	-51,1	-10,7	-19,1	-26,3	--
B8 Own threat of unemployment now (balance)	0,3	7,6	-18,8	-0,7	-2,5	-6,0	-
C1 Favourability of time for purchasing durables (balance)	19,4	41,8	-14,2	3,0	0,4	-1,0	--
C2 Favourability of time for saving (balance)	11,5	36,8	-19,6	14,8	5,9	-0,6	-
C3 Favourability of time for raising a loan (balance)	17,4	42,0	-47,1	21,4	14,8	18,8	+/-
D2 Household's saving possibilities in the next 12 months (balance)	38,4	52,2	10,9	48,5	40,9	44,2	+

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 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 population and sample of the Survey

The population of the Consumer Survey comprises 4.4 million persons aged 15 to 84 and their 2.6 million households in Finland. The population was extended to persons aged 75 to 84 starting from January 2012. The gross size of the monthly sample of the Survey is 2,350 persons (previously 2,200 persons).

In May, the non-response rate of the Survey was 40.3 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.

The extension of the population, that is, responses from persons aged 75 to 84, is estimated to have weakened the value of the consumer confidence indicator by good one unit starting from January 2012. This has primarily been caused by a drop in the balance figure of one component, namely own household's saving possibilities. The extension of the population has also somewhat affected the results on owning various home technology.

EU results

The (seasonally adjusted) Consumer Survey results for all EU countries are 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 2013, May. Statistics Finland

Inquiries: Pertti Kangassalo 09 1734 3598, Tara Junes 09 1734 3503, consumer.survey@stat.fi

Director in charge: Riitta Harala

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• 1. Method of the Consumer Survey (27.5.2013)

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Appendix tables

• Appendix table 1. Consumers' views and intentions (27.5.2013)

Figures

• Appendix figure 1. Consumer confidence indicator (CCI) (27.5.2013)
• Appendix figure 2. Micro and macro indicators (27.5.2013)
• Appendix figure 3. Own economy (27.5.2013)
• Appendix figure 4. Finland's economy (27.5.2013)
• Appendix figure 5. Inflation (27.5.2013)
• Appendix figure 6. Unemployment (27.5.2013)
• Appendix figure 7. Favourability of time for (27.5.2013)
• Appendix figure 8. Household's financial situation (27.5.2013)
• Appendix figure 9. Household's intentions to raise a loan, next 12 months (27.5.2013)
• Appendix figure10. Spending on durables, next 12 months vs last 12 months (27.5.2013)
• Appendix figure 11. Household's intentions to buy, next 12 months (27.5.2013)

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Updated 27.5.2013