Finnish Consumer Confidence Rises Above Nokia Heyday ReadingBy
Confidence index hits 24.1, highest level since records began
Business confidence at six-year high on strong order books
Finland’s consumers are more optimistic today than when Nokia Oyj dominated the mobile phone world.
Consumer sentiment rose to 24.1 in May, the highest reading since records began in 1995, Statistics Finland said in a statement Monday. Business confidence improved to plus 8, the highest in six years, the Confederation of Finnish Industries in Helsinki said in a separate statement.
“A strong growth period is underway,” Hypo Chief Economist Juhana Brotherus said by phone. “The positive news coverage on the Finnish economy has lasted for a while and that has strengthened confidence in the economy.”
Years of stagnation, in which Finland came to be known as "the new sick man of Europe," have given way to a period of economic expansion, with many economists raising their forecasts for the year. The recovery is also becoming more broad-based, as exports join consumer spending as drivers of growth.
In the late 1990s, when iconic mobile phones with all-day battery life helped turn Nokia into Europe’s most valuable company, consumer confidence peaked at 21.8. The consumer sentiment reading in May was more than twice as high as its long-term average of 11.9, the statistics office said.
An improved labor market situation is also helping to underpin confidence, with people’s fears of losing their jobs diminishing, Brotherus said. Consumers also have more money at their disposal as income-tax cuts are taking effect. The cuts, part of a labor pact designed to improve the country’s competitiveness, will be partly offset in July and August, when disposable incomes are expected to fall due to reductions to holiday bonuses.