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Joblessness risk dampening consumer confidence – firms more confident

Businesses expect production to grow before year-end.

The consumer confidence indicator, published by Statistics Finland, was -6.6 in September. In August, the indicator was -7.6, and in July, -6.4. The long-term average is -2,7.

“From the point of view of consumption and growth, it’s positive that consumers’ confidence both in their own finances and the Finnish economy is rising. That confidence is still weak, but the direction gives hope for an economic recovery,” says Roope Ohlsbom, an economist at Suomen Yrittäjät, the Finnish SME association.

Consumers’ expectations about the performance of their personal finances improved for the second month in a row. The big picture was marred by highly negative assessments of the state of Finland’s economy.

“In particular, growing unemployment, Russia’s breaches of NATO members’ airspace and the Government’s spending cuts are keeping outlooks bleak. Many households feel the need to prepare for a rainy day,” Ohlsbom says.

The threat of unemployment is considered exceptionally high, with consumers feeling the time is wrong for spending and buying consumer durables.

“Borrowing intentions were higher than normal in August and September. That increased appetite to borrow is encouraging. That may be a signal that consumers will be more active at the end of the year, perhaps buying homes or cars,” Ohlsbom says.

Business confidence rising

Finnish companies’ economic outlook is gradually recovering, and output is expected to grow by year-end, the business confidence indicator published by the Confederation of Finnish Industries shows.

“Even though the outcome disappointed many, the conclusion of EU–US trade negotiations and an easement of months of uncertainty have boosted firms’ trust in the future,” Ohlsbom says.

Companies are considerably more optimistic than consumers in their expectations of Finland’s future economic performance. The retail trade has the most positive outlook. Construction is still struggling, but some rays of light can be seen in the outlooks of companies in the sector.

“Many real-economy indicators, such as new orders in industry, have risen promisingly in recent months. For investments and private consumption to rise more broadly, it’s not just export demand that needs to recover, but also trust. Reduced interest rates and increased purchasing power support economic recovery, but Russia’s war of aggression and Trump’s tariffs are slowing that transformation down,” Ohlsbom says.

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