Consumer confidence in Germany is poised to weaken slightly in November amid mixed signals following federal elections in September, market research group GfK’s monthly survey showed Thursday.
GfK’s forward-looking sentiment index is set to fall to 10.7 points in November from 10.8 points in October, marking its second consecutive decline, the researcher said. Economists surveyed by The Wall Street Journal expected a 10.8-point reading.
“Consumer mood in the first survey since the German federal elections is not sending clear signals,” GfK said.
After the elections on Sept. 24 yielded no clear ruling coalition setup, Chancellor Angela Merkel last week started talks on forming the country’s first three-party parliamentary majority.
GfK uses three sub-indexes for the current month to derive a sentiment figure for the upcoming month.
Consumers’ economic expectations have moved on “impressively” from a weak phase in August, said GfK, as the sub-index rose to 43.5 points in October from 33.4 points in September. The economic upturn is solid and broad-based, while a strong labor market ensures the development of private consumption, GfK said.
Consumers’ income expectations dropped to 48.7 points in October from 52.7 points in September, GfK said, adding that consumers nonetheless continue to assume that their incomes will grow appreciably in the future.
“However, the topic of inflation seems to be currently of greater concern to consumers,” GfK said, adding that while September headline inflation was 1.8%, some consumer-sensitive areas such as food and fuel have much higher rates.
The propensity-to-buy sub-index–which measures consumers’ willingness to spend on big-ticket items–rose to 59.2 points in October from 57.0 points in September, helped by high job and planning security and a noticeable rise in incomes, GfK said.
Source: Dow Jones