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Fast Comment FinlandConsumer confidence still high, but on a gradually weakening trend

  1. Consumer confidence weakened to 20.2 in September
  2. Expectations concerning Finland’s economy weakened the most
  3. Consumer and business confidence still well above long-term averages
Consumer confidence weakened to 20.2 in September
Consumer confidence weakened for a fifth month in a row in September. The confidence indicator (CCI) stood at 20.2, following a 21.5 reading in August. A year ago in September, the CCI was 23.7. The confidence indicator’s long-term average is 12.6.
Expectations concerning Finland’s economy weakened the most
All four components of the CCI weakened in September from the previous month, even though consumers' assessment of their own economy in 12 months’ time eased only marginally. The decline was most notable in expectations concerning Finland’s economy in 12 months’ time. However, it is still above the long-term average. The other two components of the CCI are general unemployment in Finland in 12 months’ time and households' saving possibilities within the next 12 months.
Both consumer and business confidence still well above long-term averages
Consumer sentiment in Finland peaked in February this year and it has gradually weakened since. However, confidence is still significantly above the long-term average. The recent decline in overall sentiment has mainly been caused by a considerable weakening in consumers' views on Finland’s economy in 12 months’ time. This expectation is parallel with consensus forecasts, including our forecast, according to which Finnish GDP growth is expected to gradually moderate in 2019. In addition, the expectation about the unemployment situation in Finland in 12 months’ time has eased slightly from its high. Despite still being high, the weakening trend in consumer confidence starts to raise some concerns. However, favourable labour market trends should support the outlook for household spending. Also, business confidence surveys by the Confederation of Finnish Industries were published today and showed that confidence is still well above its long-term average in all sectors. Manufacturing confidence fell marginally from the previous month, whereas the confidence indicators for the service sector and retail trade increased somewhat. The construction indicator dropped to +8 points, from +13 a month ago, but it is still above its long-term average of -7 points.

 


 




Disclaimer

Janne Ronkanen

Senior Economist

Finland

jaro06@handelsbanken.se

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