One question was, Is it a Favourable time to make major purchases at present?
The answer was a overwhelming 36.1 points having in mind that all time high was 37.7 and all time low -14.2 which was reach last fall.
First, it has to be noted that we don't really know if the people interviewed are really representative of the population - so clearly it is not a scientific method that is being used, it is more like predicting the weather for next month.
Second, an all time low in interest rates combined with the fact that most mortgage rates are linked to variable rate is currently boosting purchasing power and to that combined with the media "green shoot" paradox and a tsunami of almost real fake sales (i.e shoes that had max price of 100 euro a year ago are now price at 130 euro with a 20% to 30% sales, another example is the amount of really "crap" quality clothes that has flooded the shops to satisfy sales consumer hunger)
Third, at the end, what does that really mean making a major purchase? Since retail sales are on free fall, permit building collapsing, car sales at almost pre war levels and housing price declining.
I would assume that major purchase at present is about "the beer" mainly influenced by the weather which happen to be exceptionnaly good.
After a better reading of the statement, I extracted the following :
"In June, many households had plans to purchase, among other things, home technology during the next six months. Sixteen per cent of households were fairly or very certain to buy a car and 7 per cent a dwelling during the next 12 months. In last year's June the corresponding proportions were 16 and 8 per cent"First to put together people that have "fair" and "very certain" buy feeling is strange, a little bit like mixing cow and bull, and hoping to get milk out of all...
To be franck, If I put as a title irrational exuberance, is simply because the Finnish consumer have been conditionned to live in a "fairly certain" begnin economical condition, a "V" type of recovery that state that crisis are mild and business as usual resume very quickly i.e inflation rising up, housing price resuming their upward trend, wage rising up and unemployement falling... As you may know by now, I do not believe a second about such scenario.
I believe more in a "W" type recovery or actually a "VL" type recovery.
In a "W" recovery, the first leg of recovery is mainly due to central banks and government pumping money into the system but the effect is short lasting and the fall resume. Ultimately a recovery restart after the economy has readjusted itself i.e less leverage, sound bank practices...
In a "VL" recovery, the first leg is similar to the "W", so after all the "legal doping" simulus is through to the economy, it fall back even lower since the growth in the past 20 years were just artificially created by easy monetary, currency manipulation and high leverage on institution and household and to that you add the demography issue that kicks in.
In Summary here is a simple forecast for the consumer confidence, a little bit like statistics finland methodologie, I used "Paint" software model combined with the help of one of my most trusted and reliable adviser, my barber: