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German consumer sentiment holds steady at 4.5 points, survey finds

German consumer sentiment holds steady at 4.5 points, survey finds

German consumers remained unchanged in their sentiment about the health of Europe's biggest economy, a report by the research group GfK found Wednesday, with many still unsure about the effect of the U.S. mortgage crisis.
The group said that its forward-looking consumer climate index was 4.5 points for March, unchanged from the same figure in February and January, a finding that it said showed that the "German consumer's sentiment is altogether steady."
The figure was just a notch higher than the 4.4 points that analysts polled by Dow Jones Newswires had predicted.
"At the start of this year, consumers are still finding it difficult to identify a clear direction for general economic trends and their personal financial situation," GfK said in its report. "The repercussions of the mortgage crisis in the (United States) are just as evident as the uncertainty prompted by unstable developments in the U.S. economy, the current high rate of inflation and volatility in the stock markets."
GfK said its subindex showing economic expectations fell to 14.6 points in February from 28.7 points in January, and was well below the 53.3 point reading in February 2007.
However, despite those concerns, GfK said that its survey found that consumers were also looking at the economic situation in a positive light, too, offsetting any pessimism.
"Development in Germany's labor market seems stable, the prospects for generous collective wage agreement settlements are good and the German economy continues to enjoy an upswing," the group said. "This on the whole varied picture led to income expectations recovering again in February to make up the loss recorded in January, while economic expectations and buying propensity fell again after a slight rise in the previous month."
But German consumers' willingness to spend more money on goods ranging from kitchen appliances to new cars was slightly down.
After two back-to-back months of rising consumer propensity to buy, it dropped back to minus 15 points in February from minus 8.8 points in January.
"For the moment, the muted positive signals of the previous months are once again consigned to the past. Presumably, concerns about rising prices are the main reason causing consumers to remain (reluctant) about making larger purchases," GfK said, adding that despite the result, it was still better than the minus 16 points from February 2007.
Wednesday's figures came a day after a survey by Munich's Ifo institute showed that business sentiment in Germany unexpectedly rose for a second consecutive month, although the results also revealed concern about the near future.
Ifo said its business climate index from February rose to 104.1, up from 103.4 in January and above the 102.8 forecast by analysts polled by Dow Jones Newswires.
Despite some better numbers in the survey, which polled 7,000 companies, the group's subindex measuring expectations for the next six months fell to 98.2 points from 99.0 in January, a signal that there is still concern about the possibility of a global slowdown should the U.S. go into a recession.
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On the Net:
http://www.gfk.de


Updated : 2021-05-06 06:18 GMT+08:00