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Published: 29 July 2013

Consumers’ confidence in the economy weakened in July

The consumer confidence indicator stood at 5.0 in July, having been 8.1 in June and 5.0 in May. In July, confidence in the economy was slightly higher than one year ago (0.1) but below the long-term average (12.4). The data are based on Statistics Finland’s Consumer Survey, for which 1,393 people resident in Finland were interviewed between 1 and 19 July.

Consumer confidence indicator (CCI)

Consumers’ expectations of Finland’s economic situation and, in particular, on the development of unemployment were more pessimistic in July than they had been in June. Views on households' saving possibilities also weakened somewhat compared to June but still remained relatively bright. By contrast, consumers’ views concerning their own economy remained unchanged, still being cautious.

Employed consumers felt in July that their personal threat of unemployment had not changed much from the situation in June. In addition, consumers regarded raising a loan more worthwhile, in contrast to their views on saving or purchasing durable goods.

Consumers' own and Finland's economy

In July, 26 per cent of consumers believed that Finland’s economic situation would improve in the coming twelve months, while more, or 32 per cent, of them thought that the country’s economy would deteriorate. In June, the corresponding proportions were 29 and 28 per cent and in last year's July 16 and 47 per cent.

In all, 24 per cent of consumers believed in July that their own economy would improve while 14 per cent of them feared it would worsen over the year. One year ago the respective proportions were 22 and 17 per cent.

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

Unemployment and inflation

Altogether 11 per cent of consumers thought in July that unemployment would decrease in Finland over the next year, while 59 per cent of them believed it would increase. The corresponding proportions were 15 and 50 per cent in June and 10 and 65 per cent one year ago.

In July, 12 per cent of employed persons believed that their personal threat of unemployment had lessened over the past few months, whereas 22 per cent thought it had grown. Two-fifths (41%) of employed persons thought the threat of unemployment had remained unchanged and one-fourth (25%) felt that they were not threatened by unemployment at all.

Consumers estimated in July that consumer prices would go up by 2.9 per cent over the next 12 months. The long-term predicted average inflation rate is 2.3 per cent.

Buying of durable goods

In July, 38 per cent of consumers thought the time was favourable for buying durable goods. Sixteen per cent of households were fairly or very certain to buy a car and eight per cent a dwelling during the next 12 months. In July, 21 per cent of households were planning to make renovations to their dwelling.

Saving and taking out a loan

Saving was considered worthwhile by 52 per cent of consumers in July. In all, 64 per cent of households had been able to lay aside some money and 77 per cent believed they would be able to do so during the next 12 months.

In July, 58 per cent of consumers regarded the time good for raising a loan. Eleven per cent of households were planning to raise a loan within one year.

Consumers' views of the economy

	Average 10/1995-	Max. 10/1995-	Min. 10/1995-	07/2012	06/2013	07/2013	Outlook
A1 Consumer confidence indicator, CCI = (B2+B4+B7+D2)/4	12,4	22,9	-6,5	0,1	8,1	5,0	--
B2 Own economy in 12 months' time (balance)	8,7	14,1	2,3	3,6	5,1	6,2	-
B4 Finland's economy in 12 months' time (balance)	3,7	25,3	-27,1	-18,7	-0,6	-5,0	-
B6 Inflation in 12 months' time (per cent)	2,3	4,6	0,6	2,8	3,0	2,9
B7 Unemployment in Finland in 12 months' time (balance)	-1,3	27,6	-51,1	-30,8	-19,6	-26,5	--
B8 Own threat of unemployment now (balance)	0,2	7,6	-18,8	-4,1	-4,0	-4,9	-
C1 Favourability of time for purchasing durables (balance)	19,2	41,8	-14,2	7,6	-0,8	4,1	--
C2 Favourability of time for saving (balance)	11,5	36,8	-19,6	12,0	3,9	2,7	-
C3 Favourability of time for raising a loan (balance)	17,3	42,0	-47,1	16,3	13,9	11,7	-
D2 Household's saving possibilities in the next 12 months (balance)	38,5	52,2	10,9	46,5	47,4	45,3	+

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 July, the non-response rate of the Survey was 40.7 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.

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, July. Statistics Finland

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

Director in charge: Riitta Harala

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• 1. Method of the Consumer Survey (29.7.2013)

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Appendix tables

• Appendix table 1. Consumers' views and intentions (29.7.2013)

Figures

• Appendix figure 1. Consumer confidence indicator (CCI) (29.7.2013)
• Appendix figure 2. Micro and macro indicators (29.7.2013)
• Appendix figure 3. Own economy (29.7.2013)
• Appendix figure 4. Finland's economy (29.7.2013)
• Appendix figure 5. Inflation (29.7.2013)
• Appendix figure 6. Unemployment (29.7.2013)
• Appendix figure 7. Favourability of time for (29.7.2013)
• Appendix figure 8. Household's financial situation (29.7.2013)
• Appendix figure 9. Household's intentions to raise a loan, next 12 months (29.7.2013)
• Appendix figure10. Spending on durables, next 12 months vs last 12 months (29.7.2013)
• Appendix figure 11. Household's intentions to buy, next 12 months (29.7.2013)

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Updated 29.7.2013