News Column

German Consumer Confidence to Dampen Ahead of Christmas

Nov. 26, 2012

German consumer confidence, now close to a five-year high, will dampen slightly in the Christmas season as people fear that wider eurozone troubles will hurt their incomes, a survey found Monday.

"A varied picture emerges of the mood among consumers in Germany in November," said the Nuremberg-based GfK research group as it released its monthly Consumer Climate survey.

"While economic expectations improved slightly, both income expectations and willingness to buy dropped."

The forward-looking consumer confidence survey fell to 5.9 points for December, from a revised 6.1 points for the previous month.

"As a result of the European debt crisis and the clear deterioration of the economic situation, German consumers continue to be unsettled," said GfK expert Rolf Buerkl in a statement.

While economic expectations had fared well, albeit at a low level, in November, income prospects "fell quite dramatically," the group said as it released its survey of about 2,000 consumers.

"In the wake of this, willingness to buy also decreased slightly, although it still remains at a very high level."

Despite the marginal drop, the report said, German shoppers remain relatively upbeat on historic trends or compared to crisis-hit European countries.

"Although economic signals are not particularly encouraging at present, Germans are not becoming more fearful of recession," said the group.

Although German exports to eurozone members had collapsed, strong shipments to the United States and Asian markets had made up for this so far.

The "overall mood in relation to income is still good", said GfK, as high employment curbs fears of job losses.

Low inflation was also boosting Germans' mood to shop, especially for big-tickets items, while low interest rates and wider economic uncertainty discourage them from giving their money to banks.

Source: Copyright 2012 dpa Deutsche Presse-Agentur GmbH

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