Consumer mood improves in Germany

Warc, 30 January 2013

BERLIN: Consumer confidence and purchase intent are both rising in Germany, largely as a result of a moderation in anxiety about the economic situation.

GfK, the research firm, polled 2,000 adults, and found that its forward-looking indicator of popular sentiment stood at 5.8 points for February, compared with 5.7 points in January.

"Despite the economic situation also being difficult in Germany in the fourth quarter of 2012, consumers are expecting a gradual revival in the economy over the course of this year," the study said.

The panel was significantly more pessimistic on the economic outlook, scoring –11.3 points. Although this total remained in negative territory, it had grown by 6.6 points from December 2012, and in four of the last five months.

Turning to potential income levels, the reading jumped by 15 points to 36 points in all, the highest value since July 2012.

"Despite the current economic slowdown, Germans continue to expect an increase in income over the coming months," the analysis argued. "This optimism is predominantly based on the assumption that the employment situation in Germany will continue to see stable development this year."

In terms of making big-ticket purchases, the index came in at 35.3 points. This marked an improvement of 15.2 points, offsetting a nine-point decline during the previous month.

"The stable employment situation is particularly important for giving consumers the planning security needed for making major purchases," GfK said.

"In addition, the fact that the consumers; propensity to save is still at a very low level also supports the buying mood."

Another trend noted by the analysis was that respondents attitudes towards banks and similar institutions continue to be unfavourable.

"Despite the current calm on the international financial markets, consumers' trust in the finance sector has not yet been restored," it said.

Data sourced from GfK; additional content by Warc staff