German Consumers See the Silver Lining

26 November 2008

NÜRNBERG, Germany: Consumer confidence has increased for the third consecutive month in Germany, with popular sentiment for December rising to 2.2 from the total of 1.9 posted in November, according to figures from research firm GfK.

Forecasters had predicted that confidence levels among German consumers would fall to 1.5, but GfK reports that slowing inflation and declining oil prices are now "giving them room to spend".

As such, the company's monthly study also found that consumers' "propensity to buy" rose to –6.7 from the abyss of –18.2 recorded last month.

This is seemingly confirmed by figures from the country's Federal Statistics Office showing household consumption up by 0.3% in Q3, compared with a decline of 0.6% in Q2 2008.

GfK further reports that consumers' income expectations have improved from –12.9 to –6.9, but their overall economic expectations have fallen from –27.5 to –30.1, the lowest level since 1991.

According to GfK: "Many Germans don't yet believe they will be significantly affected by the downturn."

However, the company also warns that on-going consumer perceptions will still "very much depend on how deep the recession is and how the labor market will be affected."

Data sourced from (Germany); additional content by WARC staff