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German Consumer Sentiment Consolidates Upward Trajectory: GfK

By Reuters
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German Consumer Sentiment Consolidates Upward Trajectory: GfK

German consumer sentiment is set to improve for a fifth consecutive month in March as energy prices fall, a GfK institute survey has shown.

The institute forecast its consumer sentiment index to improve to -30.5 heading into March, up from a revised reading of -33.8 in February, but slightly weaker than an average forecast of -30.4 in a Reuters poll of analysts.

"Recent drops in energy prices and reports that experts believe a recession in Germany this year can now be avoided mean that optimism is slowly returning," said GfK consumer expert Rolf Buerkl.

Nevertheless, he warned that the still very low level of the indicator meant that private consumption would not be able to positively contribute to overall economic development in Germany this year.

Willingness To Buy

Among the three sub-indices for the current month that serve as a basis for the forecast, income expectations and the economic outlook both continued their upward trend. Willingness to buy continued its rollercoaster of the last few months, picking up again in February after a drop in January.

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The consumer climate indicator forecasts the development of real private consumption in the following month.

An indicator reading above zero signals year-on-year growth in private consumption. A value below zero indicates a drop compared with the same period a year earlier.

According to GfK, a one-point change in the indicator corresponds to a year-on-year change of 0.1% in private consumption.

The "willingness to buy" indicator represents the balance between positive and negative responses to the question: "Do you think now is a good time to buy major items?"

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The income expectations sub-index reflects expectations about the development of household finances in the coming 12 months.

The additional business cycle expectations index reflects the assessment of those questioned of the general economic situation in the next 12 months.

News by Reuters, edited by by ESM – your source for the latest retail news. Click subscribe to sign up to ESM: European Supermarket Magazine.

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