Consumer confidence still weak

A specialist says the uncertainty caused by Donald Trump’s tariff war and Russia’s invasion of Ukraine are reflected in Finnish consumer confidence.

Fresh figures from Statistics Finland show that consumer confidence fell in May. The confidence indicator was -8.4 in May, -7.4 in April, -8.2 in March and -9.0 in February.

Roope Ohlsbom, an economist at Suomen Yrittäjät, the Finnish SME association, considers the figures a sign that the already very pessimistic views of the Finnish economy’s performance have worsened further.

“The entrenched, negative consumer confidence is stymieing Finland’s nascent economic growth,” Ohlsbom says.

For his part, Ohlsbom considers the main cause US President Donald Trump, whose tariff threats are destabilizing the global economy.

On 23 May, Trump announced new tariffs on imports from the EU, with effect from 1 June. At the time of writing (27 May), the most recent news was that the tariffs had been postponed to July and negotiations resumed.

“The words of the president of the world’s largest economy are agitating consumers’ moods and businesses’ decisions. Large procurements are being delayed and money being saved. It’s difficult to make production and investment decisions when export opportunities depend on one man’s whims. Economic confidence won’t return until the global economy no longer hangs by the thread of social media posts,” Ohlsbom says.

Consumers’ outlooks on the Finnish economy and their personal finances are worsening, while people personally consider themselves at high risk of unemployment. Statistics Finland figures show that consumers continue to consider the time extremely unfavourable for buying consumer durables, while also intending to spend less money than before.

“Consumers are like the heart of the economy. Without household consumption, money doesn’t flow and the economy doesn’t get the oxygen it needs,” Ohlsbom says.

Business confidence treading water

Businesses were for some time more optimistic than consumers, but that positive trend has now largely stopped. The confidence indicator published by the Confederation of Finnish Industries in May shows that businesses’ confidence remained almost unchanged in all industries.

“The sunniest outlooks were in retail, but the situation in construction continues to remain extremely difficult. Finland’s economic performance has fallen behind that of other Western countries due to its structural problems, such as an ageing population. Without a tariff war, interest-rate cuts and increased purchasing power would have already pushed the economy into growth, but constant uncertainty is delaying that turn.

“Donald Trump’s most recent announcement of 50% tariffs on EU imports is likely to be reflected in future confidence figures. Even though the gravity of threats declines with each transferred deadline, they are eroding trust and trade relations between Europe and America,” Ohlsbom says.

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