Consumer confidence remained weak in February, although confidence improved.
Consumers confidence in the economy improved in February. Consumers confidence was still very low in February, but the reading rose compared to the level of January and December, says Statistics Finland.
The confidence indicator was -11.9 in February, while January’s figure was -12.7 and December’s -18.5. In February of last year, the indicator got a value of -0.5, which is better than the long-term average.
Expectations for our own economy, and especially for Finland’s economy, are still very weak.
A third of consumers estimate that their own financial situation is worse than a year ago. 22 percent of consumers felt that their finances were at a better level than a year ago.
Consumers according to the timing is very bad for acquisitions. Interest in buying an apartment or a car was less than usual in February. Only nine percent considered the time to be suitable for expensive acquisitions.
Chief Economist of the Savings Bank Group Henna Mikkonen stated in a tweet that the direction is for improvement.
“Of course, there is still a long way to go to the long-term average, so you can’t be terribly happy about this now. But I guess that the bottom has now been seen,” Mikkonen wrote.
Consumers the estimate of inflation at the time of the survey rose to a record level, but the expectation was that inflation would have slowed down a year later. In February, consumers estimated that consumer prices have risen by 8.6 percent since February of last year and will rise by 5.2 percent in the coming year.
Despite the gloomy confidence figures, one’s financial situation was perceived to be good again, and the threat of unemployment was perceived to be at the usual level.
Regionally, confidence rose exceptionally to its strongest in Eastern Finland, where the confidence indicator reading was -3.1. Northern Finland saw the country’s darkest moods and the reading was -17.8.
“Even big changes in the consumer confidence indicator do not always reflect the development of consumption, not to mention smaller short-term fluctuations. The confidence survey provides a lot of interesting information, but one should be careful about the conclusions drawn from it. Imaginations do not always correspond to economic facts, and the real situation does not change as quickly as imaginations”, writes OP Group’s chief economist Reijo Heiskanen on the blog.
Heiskanen estimates that the drop in energy prices and wage increases will ease the economy in the near future. Despite this, the economic situation is not improving quickly.
“As for private consumption, the pace is only slowing down, as the savings accumulated during the corona period will no longer support consumption in the future as before,” Heiskanen writes.
Danish The Bank’s Chief Economist Pasi Kuoppamäki estimates in the release that consumer spending will not fall sharply, even though consumers are postponing many of their purchases.
Kuoppamäki estimates that consumer confidence is still quite stable despite the rise in interest rates and inflation.
According to him, the good employment situation supports stability and the reduction in heating needs reduces the risks related to the price of electricity.
Kuoppamäki tweeted that business confidence is stable, but below the historical average in all main industries.
On the business side trust is EK’s business cycle barometer remained unchanged for the last three months. Confidence in industry fell, but readings improved in construction, service companies and retail trade. Director of EK Sami Pakarinen estimates that the companies are now on a wait-and-see basis.
“It is rarely worth emphasizing individual observations, but in terms of the economic cycle, the following couple of observations are decisive in many ways. Will the positive signals from the economy strengthen and increase confidence, or will confidence begin to decline again?”
According to Pakarinen, the economies of the euro area and Finland have managed with very little damage given the circumstances so far.
“However, it is clear that the growth rate cannot significantly accelerate in the coming months either, because the central bank is tightening its monetary policy to curb inflation. For the next few months, we will be in a swamp there, drift here situation, but we will move forward”, Pakarinen predicts.
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