Consumer, business confidence dips during October

Two reports published on Wednesday show a drop in the previously high confidence levels in the Finnish economy, but the overall outlook remains strong.

Many respondents to a Statistics Finland survey said they had plans to buy a new home over the coming year. Image: Petteri Bülow / Yle

Consumer confidence in the Finnish economy has declined during the month of October, according to preliminary figures published on Wednesday by Statistics Finland.

However, despite the drop, the agency noted that the level "remained strong" at 2.7, having hit 6.0 in September and 4.0 in August.

The long-term average for the consumer confidence indicator (CCI) therefore now stands at -1.7, based on interviews conducted with 1,025 people between 1 and 19 October.

Confidence in the economy within the business sector also remained strong, according to a report by the employers' lobby group the Confederation of Finnish Industries (EK), but the outlook has weakened from earlier in the autumn.

EK's latest cyclical barometer suggests that many in the business industry sense the economic recovery is beginning to slow.

"The strongest phase of recovery from the coronavirus crisis is starting to lag, because the recovery from the deepest pit began over a year ago," EK director Sami Pakarinen said in a press release.

"When an economy recovers, the availability of skilled labour can be lacking, and other problems caused by global supply disruptions and rising costs have also presented obstacles to growth. All of these are now putting sand in the wheels of the economy."

The hospitality and tourism sectors have especially faced challenges, EK noted, as people in Finland are beginning to travel abroad again but very few tourists are coming to Finland.

EK's Director General Jyri Häkämies said he considers increasing vaccination coverage to be the one of the most important current issues for helping the Finnish economy further recover from the Covid crisis.

"We have to catch up with others again, because here we have been left behind," Häkämies wrote in the confederation's press release. "As an alternative to restrictions, a Covid passport should have been prepared in the spring so that it could have been introduced earlier. It would have also encouraged more people to get vaccinated."

Consumers expect prices to rise

According to Statistics Finland's data, consumers are preparing for prices to start rising, especially as Finland's inflation rate continues to increase.

However, the survey also found that consumers' expectations and views concerning their own financial situation remained relatively unchanged from the highs of previous months, with many respondents saying they plan to either buy a new home, renovate their current home or buy a car over the coming 12 months.

As usual, confidence was clearly at its strongest level in the Helsinki metropolitan area while it was weakest in Eastern Finland. Retired people had the most pessimistic view of the future, while white-collar workers were the most optimistic.