Consumers continue to be optimistic about the national economy, according to new data from Statistics Finland.
According to the latest indicators, consumer confidence in the economy weakened slightly between June and July. However the index remained relatively strong at 22 compared to 23 in June and to the long-term average of 12.5.
Meanwhile consumer expectations for unemployment improved in July compared to the previous month, with respondents to the monthly survey saying they were very upbeat about the prospects. Respondents were somewhat tepid about their personal as well as public finances and their potential for saving, but overall the outlook remained positive.
Overall, a belief that unemployment would shrink was also stronger than the same time last year.
The monthly survey by Statistics Finland interviewed around 1,000 residents of Finland at the beginning of July.
Firms also optimistic about economy
Corporate confidence in the economy also remained high in July, according to the business lobby group EK.
Confidence among industrial sector firms remained steady from June to July at 14. In the service sector, the index crept up to 20 from 18 in June while confidence also rose among companies in the retail sector.
Overall confidence among industrials in Finland was higher than the European average in July. The EK’s confidence indicator described companies’ view of the business environment at the time of the survey.
Economist: Growth spurt still to come
Head economist Juhana Brotherus of specialised mortgage lender Suomen Hypoteekkiyhdistys (Hypo) said in a release that the slight waning of consumer confidence in July was not unexpected.
He said a similar development had already occurred throughout the eurozone and the US, adding that a period of rapid growth has now passed.
“The sustained strength of consumer confidence topped a week of positive economic news. Tuesday’s employment figures were brilliant and yesterday the [European] central bank strengthened the secure direction of the economy. Mortgage holders don’t need to worry about interest hikes until next summer,” Brotherus expanded.
On Thursday, the European Central Bank announced that it was holding marginal interest rates on lending steady at 0.25 percent. It said that it expected the rates to remain unchanged, at least until summer 2019.
Brotherus speculated that business confidence strengthened consumer perceptions of economic growth. He predicted that the Finnish economy would see a growth spurt and that fears of a trade war would not constrain the export sector. However he said that the current construction boom could begin to tail off.
The Hypo economist said that high levels of industrial confidence and packed order books suggest that expected growth would withstand the knocks of international trade policy.