German buying mood still stable

Berlin - German consumer confidence is set to edge down in November despite the buying mood among households in Europe's biggest economy being stable, according to a recent survey.

The Nuremberg-based GfK market research group said its forward-looking consumer sentiment indicator would slip from 7.1 points in October to 7 points in November in its first decline since January.

But "the buying mood among German consumers is unbroken," GfK analyst Rolf Buerkl said.

"Consumers consider it to be a good time now for larger purchases in light of the continued stability of employment prospects, combined with real increases in income," he said, noting that there has been little change in the consumer climate in the country.

Dropped slightly

Analysts had expected GfK to say the index would nudge up to 7.2 points in November.

The GfK confirmed its forecast issued at the start of the year for private consumer spending in Germany to grow by about 1% in real terms this year and act as a key pillar of the country's growth.

Based on a survey of about 2 000 households, the survey showed that while income expectations and willingness to buy dropped slightly, economic expectations rose modestly.

"Consumers are expecting a continued stabilisation of the German economy and that the upward trend will even accelerate in the coming months," Buerkl said.

But the expectations among German consumers stand in contrast to the mood among the nation's business leaders.

Ideal conditions

German business confidence fell for the first time in six months in October amid concerns about the outlook for the nation's economy, the Munich-based Ifo economic institute said last week.

Germans consumers, however, are "still counting on positive developments in their income situation," Buerkl said.

"The steady rise in employment and emerging economic upswing provide the ideal conditions for expecting increases in wages and salaries to continue to be higher than the predicted inflation rate of just under 2%," he said.

The GfK said its index measuring household willingness to buy remained close to what it described as the "almost euphoric" level of the previous month, helped by historic low interest rates.

The willingness-to-buy index was 10.5 points higher than at the same time last year, the GfK said.

The institute's indices measuring income and economic expectations as well as willingness to buy are for the current month.

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