Confidence in Finland Holds and Extends Its Gains

Consumer confidence in Finland rose to 4.6 in June from 2.7 in May. This reading compared to a 12-month average of -1.9. Confidence has been on an upswing from that 12-month average to 1.1 over six months and to 2.7 over three months. The queue ranking for the June reading on data back to mid-1998 is in its 98.6 percentile, a quite lofty reading. One year ago, the queue ranking had been much lower at the 29.5 percentile as Covid had struck and countries were trying to cobble together an approach to deal with the virus and its ongoing manifestations. Finland has come a long way since then.

The confidence readings come with a micro- and a macro-indicators. The micro-indicator is quite stable looking at the various period averages. It is a bit lower this month at 30.8; yet, it still has a 98.2 percentile standing. The macro-indicator shows considerably more variability and becomes progressively much stronger from 12-months to six-months to three-months. The macro-indicator also moved up strongly in June compared to May. The micro-indicator's standing is not much changed from its current value to its year ago value for the macro-indicator's standing 12-months ago was at the 20.8 percentile, but by June 2021 that is up to the 83rd percentile, a striking improvement. Macro- vs. micro-conditions show a very different path of chances over the past year.

The next five readings in the table all show improvement with the exception of consumer prices now, a reading that is unchanged month-on-month. And all of the metrics show steady improvement from their 12-month average to their six-month average to their three-month average. These assessments show that the evaluation of the economy now is improving, and that the economy in 12-months is expected to be even stronger. The likelihood of unemployment in 12-months is rising and has a current assessment that is well above its historic median at a 79th percentile standing. The threat of personal unemployment also has been rising and currently sits just above its historic median. Apparently, individuals do not feel personally very threatened by unemployment, but as an overarching issue there is more vague concern about unemployment for the economy. The rankings of these metrics can be quite different as we see with the unemployment prospects. Finland's economy-now, despite steadily improving progress, is only at 25.4 percentile standing. However, there is more confidence that in 12-months the economy will be better as that response sits in its 85.9 percentile. Consumer prices have a very neutral 54.7 percentile standing, barely above its historic median standing.

There are also five readings on the subject of the economic environment. Looking at average assessment from 12-months to six-months to three-months all are showing a rising trend. Changing the least on that timespan is the assessment of the household financial situation and the possibility to save over the next 12-months. But these two metrics have been stable at a high-water mark of their respective ranges with a 99.3 percentile standing for financial situation and an 83 percentile standing for the possibility of saving response over the next 12-months. Among the remaining three categories, the favorability of the time for raising a loan balance now has improved the most from its 12-month average to its three-month average. Next best improved is the favorability of the time for savings followed by the favorability to purchase durable goods. The consumer is lagging here.

For these last three categories, the time for savings has the highest rank standing with the durable goods purchase assessment near a neutral reading around its 50th percentile and the favorability of increasing a loan balance lags slightly below its 50% (median) ranking.

This round-up give us a somewhat mixed view of the Finish consumer who seems to feel solid financially but is not reading to be financially adventuresome yet. The response to the ‘economy now' echoes that reticence with a weak 25.4 percentile assessment for the economy-now but offers a solid to strong assessment of where the economy is expected to be in 12-months (85.9 percentile standing). Compared to a year ago, all of the ranking metrics are stronger and most of them are much stronger. The average increase is standing from a year ago is about 32 percentile points implying that the average response rose to a ranked position that is about one-third of the distribution better than it was before. That is a very impressive average gain. Belief in an improved economy in 12-months was the strongest gain followed by the rise in the macro indicator. The overall confidence metric, however, shows its rise from a year ago to be greater than that of any singe component. The weakest gain in any component was from the household financial situation but don't count that as a negative since that indicator sits only 0.7% points below its theoretical maximum. Generally speaking, this survey shows a lot of improvement. There seems to be little real worrying either over the present or the future in Finland.