Consumers’ confidence on economy improves

Consumers’ confidence on Finnish economy remained strong in April, according to Statistics Finland.

The consumer confidence indicator (CCI) stood at 21.5 in April, having been 22.9 in March and 20.8 in February. Last year in April, the CCI received the value 9.8. The long-term average for the CCI is 11.9. The data are based on Statistics Finland’s Consumer Survey, for which 1,199 people resident in Finland were interviewed between 3 and 18 April.

Of the components of the CCI, expectations concerning general economic development or Finland’s economy and unemployment improved slightly in April compared to March. In contrast, views on one’s own economy and saving possibilities weakened somewhat. Compared with the corresponding period last year, all components strengthened apart from saving possibilities.

In April, consumers’ views on Finland’s economy were very positive. Views concerning one's own economy and unemployment development were also optimistic. The confidence in decreasing unemployment was highest in a decade and the views on Finland’s economy were the best since 2010. In April, consumers considered their household's saving possibilities average over the next 12 months.

In April, consumers regarded the time favourable for buying durable goods and especially for taking out a loan but not so much for saving. Employed consumers felt in April that their personal threat of unemployment has decreased clearly in recent months.

In April, as many as more than one-half, or 52 per cent, of consumers believed that Finland’s economic situation would improve in the coming twelve months, while only 10 per cent of them thought that the country’s economy would deteriorate. The corresponding proportions were 46 and 11 per cent in March and 35 and 23 per cent one year ago in April.

In all, 28 per cent of consumers believed in April that their own economy would improve, while 10 per cent of them feared it would worsen over the year. One month earlier, the corresponding proportions were 31 and 9 per cent, and one year earlier 28 and 15 per cent.

Altogether 45 per cent of consumers thought in April that unemployment would decrease over the year, while 19 per cent of them believed it would increase. The corresponding proportions were 43 and 18 per cent in March and gloomy 19 and 46 per cent one year ago.

Eighteen per cent of employed persons reckoned in April that their personal threat of unemployment had lessened over the past few months, while 14 per cent thought it had grown. Twenty per cent of employed persons felt that they were not threatened by unemployment at all.

Consumers predicted in April that consumer prices would go up by 1.6 per cent over the next 12 months. The predicted long-term average inflation rate is 2.2 per cent. Consumers estimated that inflation is currently 1.1 per cent. In April 2016, the estimate was clearly lower, 0.5 per cent.

In April, 44 per cent of consumers thought the time was favourable for buying durable goods. General intentions to spend money were mostly moderate in April. Seventeen 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 April, 19 per cent of households were planning to spend money on renovating their dwelling within a year.

Altogether, 60 per cent of consumers regarded the time favourable for saving in April. In all, 67 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. In April, households mainly planned on saving for a rainy day or for a holiday trip. Next to various bank accounts, the most planned investment targets were investment funds.

In April, 75 per cent of consumers regarded the time good for raising a loan. The long-term average proportion is 62 per cent. Fourteen per cent of households considered raising a loan within one year.

In April, consumers' confidence in the economy was strongest in Greater Helsinki and Western Finland, and weakest in Eastern Finland. Among population groups, upper-level salaried employees and entrepreneurs were most optimistic. Pensioners and unemployed persons had the gloomiest expectations concerning economic development.