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Fast Comment FinlandConsumer confidence still robust but past the peak

  1. Consumer confidence strengthened slightly in November
  2. Consumers’ concerned of the overall outlook for the Finnish economy
  3. The drop in the trend may reflect the gloomier global outlook and weaker Finnish export demand
Consumer confidence strengthened slightly in November
Consumer confidence indicator (CCI) improved in November slightly from previous month, with the index rising to 18.3 from 16.8. The peak of the confidence index in this upturn stands at 25.8, reached in in February this year, which is, according to the current data, roughly three quarters after the Finnish GDP growth peak. The CCI received the value 23.0 in last year’s November and the long-term average for the CCI is 12.6. The CCI is the average of the balance figures for the four sub-components - consumers’ assessment of their own economy, Finland’s economy, general unemployment and household’s saving possibilities (all concerning next 12 months).
Consumers’ concerned of the overall outlook for the Finnish economy
Of the four components of the CCI, consumers’ expectations concerning Finland’s economy weakened further in November compared with October, but expectations concerning unemployment development were a notch brighter than in October. It is these two components that have deteriorated the most since the peak of the overall CCI. Expectations concerning consumers’ own economy and saving possibilities remained at solid level in November. The sub-component of CCI, consumers’ assessment of Finland’s future economy, is now below its long term average, whereas the unemployment expectations continue to be relatively upbeat, above the level of its long term average.
The drop in the trend may reflect the gloomier global outlook and weaker Finnish export demand
The relatively sharp drop lately in CCI, yet from a very high peak level historically, could be explained by the gloomier outlook for the global economy and Europe particularly. This has been clearly present in global business barometers, and since October in equity markets. Economic growth has slowed in Finland during this autumn, as demand for Finnish exports has waned, particularly since spring this year. Consumers’ assessment of Finland’s economy and its future outlook follow closely the performance of the export industry.

 

 






Disclaimer

Tiina Helenius

Chief Economist Finland

Finland and Emerging Asia

tihe01@handelsbanken.se

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