Consumer confidence in economy weakens

Consumer confidence about Finland's economic situation dipped in September, although they still viewed their own financial situation as excellent, reported Xinhua, quoting Statistics Finland.

According to the agency, the Finnish Consumer Confidence Indicator (CCI) stood at -5.9 in September, down from -5.1 in August and -1.6 in July, or -4.2 in September last year.

The long-term average for the CCI is -1.8. The poll by the agency was based on interviews with 1,112 residents in September.

Consumers' views on economic development were still gloomy in September, said the agency. Of the four components of the CCI, only the opinions concerning consumers' own economy at present improved from August to September. Compared year-on-year, only expectations about Finnish economy in general improved slightly, while other CCI components changed for the worse in a year.

What's more, consumers' expectations concerning the development of the general unemployment situation dropped to an even gloomier level in September. Wage and salary earners as well as the self-employed experienced more unemployment threats.

However, consumers had slightly more intention of spending money on durable goods in September than usual. They still considered their own financial situation to be excellent, stated Statistics Finland, noting that a record number of consumers were going to take out a loan in September. Consumers also had more plans of buying a dwelling than ever. In addition, many were considering renovating their dwelling and buying a car, said the agency.

Local commentators said the September CCI paradoxically combined decreased confidence in employment and an increase in consumer spending plans. Heidi Schauman, chief economist of Swedbank Finland told a Finnish language business daily Kauppalehti that low bank interest rates were the explanation, as they were making credits cheap.

Meanwhile, the Confederation of Industries said confidence in the business community remained largely at the levels of August, except a decline in the service sector. Its chief economist Sami Pakarinen said it appeared that the recovery of the Finnish economy was not continuing, at least temporarily.

"While retail has been doing well so far, the worsened employment will impact and sales expectations deteriorated," Pakarinen said.