Finns fail to overcome pessimism about the future of the economy

In August, Finns added a little more pessimism to their predictions about the progress of their economy. The Consumer Confidence Indicator (CCI) has been sunk in negative values for ten months in a row mainly due to the darker expectations regarding the general employment situation in the country.

According to the results of Statistics Finland's Consumer Confidence Survey, the CCI stood at -4.5 in August, whereas in July it was -3.9 and in June -4.6. Last year in August, the CCI received the value 2.3 and the average for the CCI since January 2018 is 0.0. Last time the CCI showed a positive value was in November 2018.

The survey shows this is a pessimism based on fear of what might happen with the economy of the country and the employment, since the evaluation that Finns make of their personal situation is somewhat more optimistic. Thus, of the four components of the CCI, only the assessment concerning consumers’ own current economic situation improved in August compared to July. The other components deteriorated slightly.

"The expectations on Finland’s economy were very pessimistic. At the same time, the views on consumers’ own economy both now and in the future were subdued. Intentions to spend money on durable goods were slightly higher than average in August", explained Statistics Finland.

Compared with the corresponding period last year, all the components of the CCI, apart from spending, weakened in August. Especially the expectations on Finland’s economy plummeted over the year.

Source: Statistics Finland

Employment situation to darken

In August, consumers expected the general employment situation to darken in the near future. Employed consumers felt that also their personal threat of unemployment has increased in recent times. On the other hand, nearly every second employed person did not experience any threat.

In August, consumers considered their own financial situation to be average. The time was, in general, regarded favourable for raising a loan but not for buying durable goods and especially not for saving.

By region and population group

In August, consumers’ confidence in the economy was weak especially in Eastern Finland (CCI -9.6). Among population groups, upper-level salaried employees were most optimistic (2.7).

Pensioners had the gloomiest expectations concerning economic development (-14.7). Confidence in the economy usually lessens with the person’s age. Correspondingly, the confidence strengthens with education and income.

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.