Industrial Confidence in Finland

It is an industrial business confidence index built from a survey of Finnish manufacturers, who assess their current situation (order books, stocks) and their production expectations for the coming months. It is published by Statistics Finland as part of the EU's harmonised business survey.

The survey collects firms' assessments with three possible answers (better, unchanged or worse). The industrial confidence indicator is the average of the balances (positive minus negative replies) for the order books, stocks -with the sign reversed- and production expectations.

It is closely tied to industrial output and to GDP, which it tends to lead. Combining the balances for the current situation and for expectations helps place the economy in the business cycle (expansion, slowdown, recession or recovery).

It is a sentiment indicator based on response balances, whereas markets tend to focus on the headline reading; the cycle-phase reading looks only at business confidence and not at other drivers of growth.