Women’s confidence in the economy significantly weaker than men’s

Consumer confidence strengthened slightly in November. The consumer confidence indicator, published by Statistics Finland, was -6.5 in November. It was -7.6 in October and -6.6 in September. The long-term average is -2.8.

Roope Ohlsbom, an economist at Suomen Yrittäjät, the Finnish SME association, says that consumers’ increased confidence in both their own finances and the Finnish economy is positive for economic growth. However, he says that confidence remains fragile, and that one month of data does not allow any conclusions to be drawn about an economic recovery.

“The improvement in consumer confidence was driven entirely by the fact that men currently view economic developments much more positively than women. The gender gap in economic confidence opened up in 2023 and has widened further over the course of this autumn. Many of the government’s savings measures and spending cuts have hit female-dominated sectors particularly hard,” Ohlsbom notes.

Consumers’ expectations regarding their own financial situation a year from now improved, but the overall picture continues to be weighed down by highly negative assessments of Finland’s economic outlook. At the same time, assessments of households’ current financial situation weakened.

“Bleak expectations are being sustained in particular by the threat of unemployment and security-related and geopolitical uncertainty. Many households continue to prepare for more difficult times.”

Ohlsbom says the recovery in private consumption has been slower than expected, even though consumers’ purchasing power has been strengthening for some time.

“A weak labour market and general uncertainty are keeping consumers cautious, and the high savings rate reflects fears of job losses and preparation for future crises. A clear turnaround in growth is unlikely before well into next year,” Ohlsbom says.

Industry an exception among businesses

Business cycle expectations among companies are gradually recovering, and revenue growth is expected next year, says the business confidence indicator published by the Confederation of Finnish Industries (EK).

“The calming of the sharpest trade disputes between the EU and the US and an ease to months of uncertainty have strengthened companies’ confidence in the future,” Ohlsbom says.

Companies are considerably more optimistic than consumers in their expectations of Finland’s future economic performance. The most positive outlook is in the service sectors. Confidence in construction is also improving, although the situation in the sector remains very difficult.

“The autumn slowdown in industrial business cycle expectations deepened further in November. The renewed flare-up of the trade war between the United States and China is temporarily undermining confidence among industrial companies,” Ohlsbom says.

“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. Lower interest rates and rising purchasing power support economic recovery, but weak confidence is slowing the economic turnaround,” Ohlsbom says.

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