Germany: German consumers grow slightly more confident in March
February 25, 2016
In March, the mood among German consumers ticked up somewhat. The forward-looking consumer confidence indicator published by the GfK Group inched up from February’s 9.4 points to 9.5 points in March, which contrasted market expectations of a slight drop to 9.3 points. Consumer confidence has been hovering around 9.4 points since November.
In addition to the overall consumer confidence indicator, which estimates consumer sentiment in the coming month, the GfK elaborates on three sub-indicators, which refer to February. Households’ income expectations improved markedly in February, reaching the highest level since last July. Income expectations are supported by increasing employment and firms’ rising demand for labor, which gives unions more power for upcoming wage negotiations. Conversely, households’ expectations for the overall economy remained positive, even though they declined slightly compared to January. According to the survey report, consumer’s positive economic expectations largely reflect Germany’s strong labor market. In addition, the GfK noted that apparently expectations are not negatively affected by, “the latent terror threat, heated discussions about limiting the influx of refugees and increasing tension on the world’s stock markets.” Meanwhile, consumers’ propensity to buy stabilized at a high level in February.