German consumer confidence falls

27 October 2009

FRANKFURT: Consumer confidence levels in Germany have fallen for the first time since September last year, with purchase intentions among shoppers in the country also continuing to decline, GfK, the research firm, has reported.

The GfK Consumer Climate MAXX Survey is based on a monthly poll conducted among 2,000 people in Europe's biggest economy, which has recently, statistically at least, climbed out of recession.

Overall, the forward-looking index for November decreased to 4.0 points from the total of 4.2 points recorded the previous month, and remained significantly under the long-term average of nine points.

"Despite this slight setback, private consumption remains the major source of support for the German economy this year, since investments and exports will record large decreases at the close of 2009,” GfK said. 

"It remains to be seen whether private consumption can also fulfil this supportive function in the coming year." 

In terms of the overall economic climate, popular perceptions improved by more than five points in October, to 8.7 points, the seventh successive month-on-month increase.

By contrast, the income expectation barometer contracted by 3.1 points, to 12.9 points, although this figure is up by almost 26 points compared with the same period in 2008.

The "propensity to buy" reading, however, tumbled ten points, to 26.1 points, although GfK argued this still represents "a comparatively good level", as it was 44 points up on an annual basis.

"Consumer price expectations are no longer decreasing. A turning point has clearly been reached here. The rate of inflation is likely to enter positive territory once again in the coming months, predominantly as a result of energy prices," the company added.

Data sourced from GfK; additional content by Warc staff