Consumer confidence on rise in April but economy remains weak

The balance figure of the consumer confidence indicator stood at minus 7.9 in April, having been minus 10.8 in March and minus 11.9 in February, according to Statistics Finland.

One year ago in April, the consumer confidence indicator (CCI) received the value minus 11.7.

Confidence in the economy was last time stronger in February 2022 (0.5). The long-term average for the CCI is minus 2.2.

The data are based on Statistics Finland’ consumer confidence survey, to which 1,020 persons resident in Finland responded between 1 and 18 April.

Expectations concerning one's own economy in 12 months' time already improved to the average level. Expectations concerning Finland's economy also improved clearly but still remained fairly weak.

The assessment of the present situation concerning one's own economy weakened especially from one year ago and was at a very low level.

Intentions to spend money on durable goods remained scarce. The time was still considered very unfavourable for making purchases.

The estimate of inflation at the time of the survey remained unchanged. Expectations concerning inflation in one year's time continued to fall slightly.

Consumers' own financial situation and saving possibilities were assessed as reasonable. The threat of unemployment was felt to have remained usual. An average rate of intentions to buy a dwelling was recorded.

In April, consumer confidence in the economy was clearly strongest in Greater Helsinki (CCI minus 0.6). Confidence was weakest in Eastern Finland ( minus 13.2).

Among population groups, upper-level salaried employees were most optimistic ( minus 1.2). In April, pensioners clearly had the gloomiest expectations concerning economic development ( minus 19.1).

In April, consumers' expectations concerning their own and Finland's economy in 12 months' time improved clearly compared to both March and one year earlier. Expectations concerning one's own economy were already on the long-term average level. The outlook for Finland's economy still remained fairly weak in April.

Views concerning consumers’ own economy at present weakened especially from the previous year and were very low in April.

Thirty-three per cent of consumers thought in April that their own economy was weaker than one year ago. Only 21 per cent of consumers regarded their own economy stronger at the time of the survey than one year ago. As many as 74 per cent of consumers thought that Finland’s economy was now worse than one year earlier, and only five per cent saw it better.

In April, 22 per cent of consumers believed that Finland’s economic situation would improve in the coming twelve months, while 34 per cent of them thought that the country’s economy would deteriorate. In all, 30 per cent of consumers believed in April that their own economy would improve and 18 per cent of them feared it would worsen over the year.

Unemployment and its threat

Consumers’ expectations about the development of the general unemployment situation in Finland improved in April but remained on the long-term average level. Twenty per cent of consumers expected that unemployment would decrease over the year and 34 per cent believed it would increase.

At the same time, employed consumers (wage and salary earners and self-employed persons) felt in April that their personal threat of unemployment or temporary lay-off had lessened slightly. The threat was estimated to be on the same level as the long-term average. Five per cent of employed persons believed that their personal threat of unemployment had lessened and 15 per cent thought the risk had grown. Over one half or 54 per cent of employed persons felt in April that they were not threatened by unemployment or temporary lay-off at all.

Inflation

In April, consumers' estimates of inflation at the time of the survey remained almost unchanged. By contrast, expectations concerning the rate of change in prices in one year continued to fall gradually.

Consumers estimated in April that consumer prices have risen by 8.1 per cent from April last year and would go up by 4.9 per cent over the next year. Altogether 91 per cent of consumers thought that prices had gone up much or fairly much over the year. Clearly fewer consumers, or 33 per cent, expected prices to rise at least at the same rate in coming months as well.

Financial situation, saving and raising a loan

As in the preceding few months, the time in April was considered very poor for taking out a loan and also for saving. Just nine per cent of consumers regarded the time favourable for taking out a loan and 39 per cent considered saving worthwhile. At the same time, intentions to take out a loan were also quite low. In April, 14 per cent of consumers were planning to take out a loan within one year.

Consumers considered their own financial situation to be average in April. Consumers expected to have slightly more saving possibilities in the coming months than usual. Fifty-six 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.

Spending and intentions to make large purchases

In April, the time was still regarded very unfavourable for buying durable goods. Only nine per cent of consumers thought the time was favourable for making expensive purchases.

Consumers’ intentions to spend money on durable goods in the next 12 months were still very low in January. Intentions to buy increased slightly from March but fell back compared to one year ago. In April, 11 per cent of consumers planned on increasing and 42 per cent on reducing their spending on durable goods over the next 12 months.

In April, there were slightly fewer plans than usual to buy a car during the next 12 months. By contrast, intentions to buy and renovate one’s dwelling were unchanged from the long-term average.

In April, 13 per cent of consumers were either definitely or possibly going to buy a car during the next 12 months. Similarly, 13 per cent of consumers considered buying a dwelling or building a house. Seventeen per cent of consumers were planning to spend money on renovating their dwelling during the next 12 months.