Into the shops
January 26, 2012
German consumer confidence is continuing to rise, according to the latest index of household sentiment by the Nuremberg-based market research company GfK. Based on a poll of 2,000 average consumers, the survey forecast a rise in confidence to 5.9 percent for February, up from a positively revised 5.7 percent in January of this year.
"[German] consumers are continuing to resist the growing recessionary tendencies in Europe which look likely to spare Germany," the study said. "For the second month in a row, economic expectations have risen and consumers' willingness to spend is increasing as a result."
Analysts view the latest index as an expression of the favorable employment situation in Germany, with income expectations being more or less stable. The GfK pointed to a growing lack of highly skilled labor in the country, which was nurturing people's hopes that incomes would gradually rise in the course of 2012.
The survey said that inflation would most likely be kept at bay this year and remain below the two-percent threshold. Thus consumers would effectively have more to spend on goods and services.
No incentives to save
"In the second half of 2011, Germans were in a state of shock because of the escalating eurozone debt crisis," the chief economist with Berenberg Bank, Holger Schmieding, told Reuters news agency.
"But since the measures taken by the European Central Bank in December, consumer fears have been dwindling," Schmieding added.
GfK marker researcher Rolf Bürkl said consumers had lately been buying large amounts of furniture and household appliances as wellas watches and jewelry made of gold, silver or platinum.
"We reckon that private consumption will account for 60 percent of GDP in Germany this year," Bürkl told DPA news agency.
Given the sluggish global economy and ongoing eurozone debt worries in particular, Germans' increasing willingness to spend money could be critical to heading off a recession. Economic think tanks expect the country to post moderate 0.3-percent growth in 2012.
Author: Hardy Graupner (Reuters, AFP, dpa)
Editor: Nancy Isenson