The consumer
The Economic Sentiment Indicator (ESI) for the consumer (NACE rev. 2)
The Economic Sentiment Indicator for the consumer measures the consumers beliefs about the economic situation. This indicator is one out of five indicators, who together make the Economic Sentiment Indicator.
The economic sentiment indicator is a combination of indicators that indicate what beliefs the industry and consumer have about the state of the economy. The main finding of the survey is the sentiment indicator, which is a calculated number with the basis in weighted indicators from surveys of the four industry groups and one consumer survey.
The sentiment indicator is therefore not a measurement of the actual numbers in the economy, but a survey about what convictions the key groups in society have about the current state of the economy and their own financial situation, both current situation and what the prospects are.
A number does only have meaning if it is compared to historical data derived from the same question. To be able to make any conclusions about the number, the average is defined. The average can therefore be used to conclude whether the result is positive or negative.
The survey is conducted by calling 500-600 random households, and they answer 15 questions about their financial situation, their outlook on the economic situation and prospects of the Faroe Islands. The consumer must choose between 5 or 6 responses for each question. The consumer can answer strongly agree/disagree, agree/disagree, neither and do not know.
The indicators for the individual surveys are the averages of balances for selected questions. The indicators of the consumers are an average of the balances of 4 out of 15 questions in the economic sentiment indicator. The four questions are:
How do you expect the financial position of your household to change over the next 12 months?
How do you expect the general economic situation in this country to develop over the next 12 months?
How do you expect the number of people unemployed in this country to change over the next 12 months?
Over the next 12 months, how likely is it that you will save any money?
Glossary:
A balance is a calculated average from the per cent distribution of the answers to each question.
Indicator: An indicator is calculated with the basis in selected balances in each individual survey. The indicator is calculated as an average of the balances. The indicator is the interval between 100 to -100.
Average: For the individual balances and indicators, the long-term average is calculated in that order in that way that each balances/indicator can be compared to the long-term average.
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Table in Statbank