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Consumer confidence in the Finnish economy grew in May

Overall, consumer confidence was slightly lower than the previous month.

Kuluttaja Kämpin Galleriassa.
Consumer confidence in the Finnish economy strengthened in May. Image: Sasha Silvala / Yle
Yle News

Consumer confidence in the Finnish economy improved in May, according to data from national statistics institution Statistics Finland.

Overall, consumer confidence was slightly lower compared to the month prior, with the consumer confidence indicator (CCI) - which provides an insight into households' future consumption and saving plans - coming in at 2.7 in May, down from 3.8 in April. In March, the same indicator stood at -3.0.

"Households feel like they are still going strong. The small decrease from the previous month is likely due to an incidental spike," Danske Bank economist Jukka Appelqvist tweeted.

Consumer confidence is clearly higher than at the beginning of the pandemic, a year ago. Expectations of the progress of the Finnish economy in particular have strengthened considerably from a year ago.

The data is based on a consumer confidence survey, to which 990 people living in Finland responded between 1 and 19 May.

Many plan to borrow money and buy a home

Consumer perceptions of the current state of their own economy weakened somewhat in May compared to the previous month. Nevertheless, consumers still rated their own financial situation as excellent. In May, consumer perception of their own financial situation was the second best in history after a record level in April. The statistics cover the period since 1995.

"Right now, households are waiting for the opening up of the economy and an increase in opportunities to spend. Household optimism will ensure that consumption demand remains strong in the coming months," Appelqvist said in a statement.

In May, a significant number of people maintained they were planning to take out a loan within a year. As in recent months, many also planned to buy a home. A lot of people were considering renovating their homes, according to Statistics Finland.

Consumer confidence was by far the strongest in the Helsinki metropolitan area. The weakest financial outlooks were in Western and Eastern Finland.

Service providers’ confidence on the rise

In the service sectors, companies' financial confidence is now recovering rapidly from the squeeze caused by the Covid pandemic, according to data collected by the Confederation of Finnish Industries (EK).

The confidence indicator for service providers was +10 in May, which is eight points higher than in April. Confidence in service providers has already risen close to the long-term average of +12.

According to EK, the sales volumes of companies providing services have increased from the previous month, and sales expectations for the coming months are encouraging.

Business confidence also improved within the industry and retail sectors in May. In contrast, confidence in construction dropped slightly from the previous month.

"Confidence is now recovering at a good pace, especially in the service sectors that have suffered from restrictions. There is also a clear rise in retail. The savings accumulated by households are now going towards spending, once the Covid situation has eased and vaccinations have progressed," EK's leading economist Sami Pakarinen said in a press release.

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