BERLIN: Consumer confidence levels have increased to their highest levels in 14 months in Germany, with knock-on benefits in terms of planned purchase behaviour in the country, a new study by GfK has found.

According to the research firm, the forward-looking consumer confidence index for August recorded an uptick to 3.5 points, an improvement of half a point on July's figures.

Similarly, when measuring respondents' willingness to buy new products, the index increased from 14.5 points in July to 25.1 points in August, although this total was still down on the score of 26.2 points registered in the same month in 2008.

Factors said to be contributing to the overall improvement in consumer perceptions this year included lower levels of inflation and a largely stable employment market.

However, GfK also warned that "a long-lasting stabilisation of the consumer climate will depend on how the labour market develops in the future. If the unemployment figures climb high in late autumn, this will be a test for consumer confidence."

Another recent poll by Ernst and Young reported that two-thirds of German companies expect the domestic economy to improve next year, a total that rose to nearly 80% saying the same for 2011.

Moreover, 54% of the businesses taking part in the survey predicted Europe's biggest economy would emerge stronger from the downturn than it was before the financial crisis began.

Data sourced from AFP; additional content by WARC staff