Finnish consumer confidence in the economy weakened in October. Business sentiment showed improvement during the same period according to new economic indicators.
The confidence indicator from Statistics Finland stood at -7.6 in October, down from -6.6 in September.
Consumers rated their current financial situation as worse than in September. The assessment remained at a poor level overall.
Expectations about unemployment trends darkened further. More consumers felt personally threatened by unemployment than before.
Most respondents considered the timing unfavorable for major purchases or taking loans. Spending intentions remained limited. Plans to buy housing continued at notably low levels.
Expectations for both personal and national economic situations in one year remained unchanged but weak.
Consumer confidence has also weakened compared to last year. In October last year, the confidence indicator measured -6.8.
The current reading is clearly weaker than average. The long-term average for the indicator is -2.7.
Just over 1,100 people living in Finland responded to the consumer confidence survey in October.
While consumer confidence weakened, Finnish companies reported more positive business prospects. The Confederation of Finnish Industries' business barometer showed improved outlooks, particularly in manufacturing.
Industrial production appears set for clear growth according to the barometer. Services sector sales continue their modest upward trend. The very weak construction sector outlook is expected to improve slightly.
Despite improved prospects, the current situation across all main industries remains weaker than average.
The weakest demand phase appears to be over according to the barometer. Still, over half of all Finnish companies report weak demand limiting their operations.
Staff numbers show slight growth in manufacturing based on the barometer. Other sectors still report minor declines in employment. About one-tenth of barometer respondents simultaneously report labor shortages.
Penna Urrila, chief economist at the Confederation of Finnish Industries, said in a statement that the barometer shows encouraging signs of Finnish companies' economic prospects turning positive.
"After a weak second quarter, recent months have been slightly better. There are particular expectations for continued growth in industry," Urrila noted.
"Uncertainties in the global economy and trade policy haven't dissipated. This continues to create uncertainty in the investment environment and the sustainability of the growth turn. However, the Finnish economy appears to be heading toward moderate growth, though we'll still have to wait some time for the labor market turnaround," Urrila continued.
Nearly 1,200 companies employing about 275,000 people in Finland responded to the Confederation of Finnish Industries' survey in October.
The conflicting signals between consumer pessimism and business optimism reflect Finland's challenging economic transition. Consumers clearly feel the pinch of economic uncertainty while businesses see early signs of recovery.