Finns are pessimistic about the future of the economy
Consumer confidence added in July the ninth consecutive month in negative values. Employed consumers felt a greater threat of unemployment, according to Statistics Finland.
Finns are pessimistic about the progress of their economy. According to Statistics Finland, the consumer confidence indicator (CCI) stood at -3.9 in July, having been -4.6 in June and -1.8 in May.
With July is now nine consecutive months that this indicator is situated in negative values. CCI offers valuable information about the expectations of consumers, for example regarding employment, their future purchasing capacity and the general progress of the economy.
The confidence indicator can vary in a range between -100 and +100. On that scale, negative values indicate pessimism and positive values, optimism. The higher (positive) figure achieved, the brighter the view on the economy is.
Last time the confidence of Finnish consumers showed a positive value (0.2) was in October 2018. In the following month, November, it went down to -1.7 and began a pessimistic debacle that accentuated with the arrival of summer.
The negative evolution in consumer expectations is even more noticeable in annual terms, when comparing the value reached this July (-3.9) with that obtained in July 2018 (+2.5).
Source: Statistics Finland
In monthly terms, of the four components of the CCI, only expectations about Finland's economy weakened in July from June. "Expectations concerning Finland’s economy were very pessimistic", remarked Statistics Finland in a press release.
At the same time, views on consumers’ own economic situation now and in the future were subdued. Intentions to spend money on durable goods were higher than average in July.
Compared with the corresponding period last year, all the components of the CCI apart from spending weakened. Especially expectations concerning Finland's economy plummeted over the year. However, the answers provided by the respondents suggest that pessimism has more to do with fear of the future than with the current situation.
Darker employment expectations
According to Statistics Finland, in July consumers expected the general employment situation to darken in the near future. Employed consumers also felt that their personal threat of unemployment has increased in recent times. On the other hand, every second employed person did not experience any threat.
Source: Statistics Finland.
Despite this general fear of entering the list of unemployed, consumers considered their own financial situation to be good. The time was, in general, regarded favourable for raising a loan and, with some reservations, also for buying durable goods and saving.
Confidence by region and population groups
In July, consumers' confidence in the economy was strongest in Greater Helsinki (CCI 0.7) and weakest in Eastern Finland (-9.1).
Among population groups, upper-level salaried employees were most optimistic (2.5). Pensioners (-11.9) and unemployed persons (-11.0) clearly had the gloomiest expectations concerning economic development.