World Economy

Finns Optimistic About Future

Finns Optimistic About FutureFinns Optimistic About Future

Finland’s businesses as well as consumers are increasingly optimistic about the future, suggests data published by Statistics Finland and the Confederation of Finnish Industries.

Statistics Finland on Friday reported that its consumer confidence indicator crept up to 21.0 in January, representing an increase of 1.5 from the previous month and one of 9.2 from the long-term average of 11.8, FNA reported.

EK announced that its business confidence indicator improved to +2 in January, signaling an increase of 1.0 from both the previous month and the long-term average.

“Consumers are unperturbed by the darkness, as the confidence indicators tell us about solid growth. The sentiment rose ever higher and the indicators tell us about a wild upswing,” commented Juhana Brotherus, the chief economist at the Finnish Mortgage Society.

Statistics Finland’s consumer confidence index consists of four components: consumers’ expectations about the national economy, the employment situation, their own financial situation and their own savings possibilities.

Consumers’ views of both the national economy and the employment situation were especially bright in January, but they also voiced their confidence in their own financial situation and ability to save during the next twelve months.

Henna Mikkonen, an economist at Danske Bank, points out that private consumption has recently been the primary driver of economic growth in Finland. Despite the optimism of consumers, she adds, the increase in private consumption is likely to slow down this year.

“Wages are not on the rise because the competitiveness pact and increasing inflation are eating away most of the gains in purchasing power. On a more positive note, unemployment will continue to decline and interest rates remain low, supporting indebted households,” she says.

Business confidence, in turn, strengthened in the construction, manufacturing and retail sectors but remained unchanged in the service sector in January.

EK on Friday revealed that manufacturing companies estimated that their production volumes will increase moderately and that their order books will remain near the current, lower-than-average levels. Construction companies expect their manpower needs to increase despite the thinner-than-usual order books. 

Service providers revealed that their sales have continued to grow and are expected to continue doing so in the months to come. Retailers, similarly, reported a slight up-tick in sales and indicated that the sales are to remain stable over the next three months.


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