Interior furnishings find buyers as consumer confidence perks up a little

Barometer shows confidence in the economy still weak, but figures have improved from December low

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"I only came to buy a plant pot, but for some reason I wandered in here first", laughs Teija Salomaa in the lighting department of the Kodin Ykkönen store in Vantaa's Porttipuisto.
      Saloma is looking at standing lamps, even though she doesn't actually need one as such.
      "All the same, we should still get something new", she says.
     
According to the Statistics Finland Consumer Survey barometer, many others are thinking and acting in the same way as Salomaa.
      Consumer confidence hit bottom in December 2008, but has recovered slightly in January.
      Consumers seem particularly ready right now to buy durables and to redecorate the home.
      Whereas the index depicting whether it was a favourable time to make major purchases at present went negative in December (-7.7), it had bounced up to +31.0 in January.
     
It would appear that the message put out by the government, economic experts, and even a large advertising campaign has gone through: by consuming one keeps the wheels of the domestic economy turning and the recession at bay.
      It is not quite that straightforward, however: even though the Finns' urge to consume now looks to be going in the right direction for the health of the national economy, the euros are not necessarily finding their way yet into the retailers' cash registers.
      On Tuesday afternoon it was pretty quiet in the furniture store, and in the neighbouring hi-fi and electronics outlet business was pretty much as dead as a doornail.
      The Kodin Ykkönen department store director Ossi Pihlaja nevertheless says that trade in January has been at the same level as in 2008.
     
"Carpets, light fittings, curtains, kitchenware, and furnishing items are selling. When the housing business is in the doldrums, people are clearly turning their attention to doing up the place where they now live instead", says Pihlaja, currently planning a new discount campaign.
      Kaarina and Nils Suomalainen are also in the store with a view to refurbishing their home, and are spreading out mats for the apartment hallway. They also want to find a standard lamp for the floor.
      "Kaarina takes the view that we ought to spend now, but I'm a bit more cautious. We are not buying anything hugely expensive", says Nils Suomalainen.
     
At the same time as people look to be more willing to consume, the readiness to save has declined. The barometer figure for "a favourable time to save at present" declined from 25.6 to 15.3 between December and January.
      The result is not exactly rocket-science: if one does as bidded and goes out and buys a sofa and a fridge, there will not necessarily be money left to put into the piggy-bank.
     
One thing that prevents people from developing any kind of shopping hysteria is the salient fact that more and more fear unemployment will knock at their door.
      The figures for January indicate that just 7% of consumers in January believed that unemployment would decline over the year, while roughly 80% felt it would increase.
      Twelve months ago the respective figures were 35% and 29%.
      Again, just 8% of those employed believed in January that their personal threat of losing their job had lessened over the past few months, while 26% feared it had grown.
     
All in all, the Finnish consumers' picture of the outlook has become a shade brighter after an exceptionally grim December.
      This does not detract from the fact that people still see the prospects for Finland's economic situation in 12 months' time in a weak and negative light.
      The CCI or consumer confidence indicator stood at -3.9 in January, as against -6.5 in December and -4.5 in November.
      The last time the CCI was in negative territory was in the recession years of the early 1990s.


Previously in HS International Edition:
  Nielsen: consumers already careful with their spending (5.12.2008)
  The Latte Calculator (13.1.2009)

See also:
  Economic optimism plummets among consumers and industry (2.1.2009)

Links:
  Statistics Finland (27.1.2009): Consumers regard the time very favourable for buying durable goods

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