Finnish consumers’ confidence in economy continues to weaken

Nordic Exchange suffering more than bourses in other European countries

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Recent pessimistic economic news as well as the uncertainty of the financial market have unsettled Finns’ belief in the economic outlook.
      According to the data gathered by Statistics Finland’s Consumer Survey, Finnish consumers’ confidence in the economy was in January already slightly weaker than the long-term average.
     
The consumer confidence indicator stood at 13.1 in January, having been 20.3 in August 2007, while the long-term average is 13.9.
      In January, Finns still believed that the financial situation of their own household would remain good, even though their views concerning their own economy were more cautious than before.
      Moreover, consumers' views concerning their saving possibilities continued to be bright, while buying durable goods was also regarded as worthwhile in January. This view may partly be attributable to Finland’s recent car tax reform, according to Pertti Kangassalo from Statistics Finland.
      While employed Finns’ confidence in their own employment improved slightly from December, consumers’ expectations concerning the development of unemployment in general weakened in January from the previous month.
     
Kangassalo notes nevertheless that there is no reason to speak about a severe loss of confidence, even though the consumer confidence indicator dropped below the long-term average.
      According to real estate agents, the sales of homes have also slowed down. While consumers’ confidence in their future economic well-being naturally has some impact on the sales of dwellings, it is also true that some sellers’ asking prices are too high in the light of the current market situation, consequently extending the selling period.
     
The Consumer Survey measured this component of the consumer confidence indicator by asking the respondents whether or not they thought that the time of the interview was a favourable time to raise a loan. In January 2008, 46 per cent of consumers regarded the time as good for raising a loan. Twelve months earlier, the respective proportion was 60 per cent.
      The data are based on Statistics Finland's Consumer Survey, for which 1,534 people resident in Finland were interviewed between January 2nd and 18th.
     
At the same time, the worst fears over the constant fall of share prices were dispersed on Monday morning. However, in Asia the share prices continued to suffer losses, while in Europe the stock indexes were almost the same as last week. Moreover, in the USA stock prices were on the upswing again.
      In comparison with other European stock exchanges, the results of the Nordic Exchange continued to show a downward trend.
      The situation has been the same since last September, with the worst problems having been encountered in Iceland.
      Analysts have several explanations for the stock exchange problems being faced by the wealthy Nordic countries. When the world of finance is not doing well, stock prices in the countries on the periphery almost without exception drop more than the ones elsewhere.


Previously in HS International Edition:
  Monday fall in share prices on Helsinki Stock Exchange sharpest in four years (22.1.2008)

Links:
  Statistics Finland
  The Nordic Exchange OMX

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