Consumer confidence remains very weak in July

The balance figure of the consumer confidence indicator (CCI) stood at minus 7.2 in July, having been minus 7.6 in June and minus 10.3 in May, according to Statistics Finland.

In July 2023, the consumer confidence indicator received the value minus 8.8.

The long-term average for the CCI is minus 2.5.

The data are based on Statistics Finland’s consumer confidence survey, to which 1,184 persons resident in Finland responded between July 1 and July 21.

Consumers’ views on both their own and Finland’s economy remained more or less unchanged in July compared to June.

The time was considered very unfavourable for buying durable goods and intentions to spend money on consumption were scant.

Intentions to buy a dwelling returned to the subdued level seen in May.

Views on consumers' own financial situation and on the household’s saving possibilities in future improved slightly compared with the early part of 2024.

In July, consumer confidence in the economy was strongest in Greater Helsinki (CCI minus 3.5). Confidence was weakest in Eastern Finland ( minus 9.5).

Among population groups, upper-level salaried employees were most optimistic (0.7) while unemployed persons had the most negative expectations concerning economic development ( minus 14.2).

In July, women’s ( minus 10.9) interpretation of the economic development was clearly gloomier than men’s ( minus 3.6).

In July, consumers’ estimate of their own economy at present was still on a very weak level. Consumers' expectations concerning their own and also Finland's economy in 12 months' time were subdued.

Twenty-nine per cent of consumers thought in July that their own economy was weaker at the time of the survey than one year ago.

Twenty-three per cent of consumers regarded their own economy as stronger than in the previous year. In July, 60 per cent of consumers thought that Finland’s economic situation was worse than one year earlier, and 10 per cent saw it as better.

In July, 26 per cent of consumers believed that Finland’s economic situation would improve in the coming twelve months, while 36 per cent of them thought that our country’s economy would deteriorate. In all, 27 per cent of consumers believed in July that their own economy would improve and 17 per cent of them feared it would worsen over the year.

Consumers’ expectations concerning the development of the general unemployment situation in Finland weakened slightly in July and still remained on a weak level. Fifteen per cent of consumers expected that unemployment would decrease over the next year, and slightly over one half, or 52 per cent, believed it would increase.

Employed consumers (wage and salary earners and self-employed persons) reckoned in July that their personal threat of unemployment or lay-off was still high. Six per cent of employed persons believed that their personal threat had lessened and 23 per cent thought the risk had grown. On the other hand, 40 per cent of employed persons felt in July that they were not threatened by unemployment or temporary lay-off at all.

In July, consumers' estimates of the inflation at the time of the survey and price changes in one year's time remained more or less unchanged compared to June.

However, estimates of inflation were still fairly high.

Consumers estimated in July that consumer prices have risen by 5.2 per cent from last year's July and would go up by 3.9 per cent over the next year.

Altogether 61 per cent of consumers thought consumer prices have risen much or fairly much over the year, and 47 per cent of them expected prices to rise at least at the same rate over the coming months as well.

In July, the time was still regarded very poor for raising a loan and poor for saving. Twenty per cent of consumers regarded the time favourable for raising a loan and 43 per cent considered saving worthwhile. However, there were slightly more plans to raise a loan than usual in July. Seventeen per cent of consumers were planning to raise a loan within one year.

Consumers' assessment of their own financial situation was slightly better in July than the long-term average.

Consumers also expected their saving possibilities to be slightly better than usual in the coming months. In July, good one half, or 57 per cent of consumers, had been able to lay aside some money and 74 per cent believed they would be able to do so during the next 12 months. In the early part of 2024 (from January to June), 55 per cent of consumers, on average, had been able to lay aside some money and 70 per cent, on average, believed they would be able to do so during the next 12 months.

Consumers’ intentions to spend money on durable goods during the next 12 months continued to be scarce in July.

In July, 11 per cent of consumers estimated they would increase and 39 per cent that they would reduce their spending on durable goods over the next 12 months.

In July, consumers’ plans to buy a car over the next 12 months were slightly more cautious than usual.

Plans to buy a dwelling more or less returned to the level of May: very few consumers had a new dwelling in mind. Intentions to renovate one's own dwelling were lower in July than on average.

In July, 13 per cent of consumers were either definitely or possibly going to buy a car during the next 12 months.

Eleven per cent of consumers considered buying a dwelling or building a house. The corresponding share was 15 per cent of consumers in June and 11 per cent in May. In July, 16 per cent of consumers were planning to spend money on renovating their home during the next 12 months.