August 29, 2018 / 6:01 AM / 8 months ago

German consumer morale darkens unexpectedly - GfK survey

    BERLIN, Aug 29 (Reuters) - The mood among German shoppers
deteriorated unexpectedly for the second month in a row heading
into September, a survey showed on Wednesday, casting some doubt
about the strength of a consumer-led upswing in Europe's largest
    Household spending was the main growth driver in the first
half of the year, together with higher state consumption and
investments in construction, providing a buffer against an
uncertain trade environment.
    The GfK research institute said its consumer sentiment
indicator, based on a survey of around 2,000 Germans, fell to
10.5 going into September from 10.6 a month earlier.
    Analysts polled by Reuters had forecast an unchanged reading
of 10.6.
    "While economic expectations improved, income expectations
and the propensity to buy declined a bit," GfK researcher Ralf
Buerkl said. But all sub-indicators remained on a relatively
high level overall, he added.
    The dip in income expectations is probably linked to the
recent rise in energy prices that has propelled German inflation
to above 2 percent, Buerkl said.
    "Based on the continuing low interest level, it might be
obvious to some consumers that savings are increasingly losing
value due to inflation," he said.
    "A further increase in inflation would certainly dampen the
consumer climate," Buerkl added.
    The propensity to buy remained relatively high despite
edging down, Buerkl said, pointing to Germany's booming labour
market, record-low unemployment and increased job security.
    "This ensures planning security with consumers, particularly
when it involves larger expenses," Buerkl added.
                                 SEPT 18   AUG 18    SEPT 17
 Consumer climate                10.5      10.6      10.9
 Consumer climate components     AUG 18    JULY 18   AUG 17
 - willingness to buy            55.2      56.2      58.1
 - income expectations           52.6      57.5      61.4
 - business cycle expectations   22.2      15.7      30.4
    NOTE - 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 ago.
    According to GfK, a one-point change in the indicator
corresponds to a year-on-year change of 0.1 percent in private
    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?"
    The income expectations sub-index reflects expectations
about the development of household finances in the coming 12
    The additional business cycle expectations index reflects
the assessment of those questioned of the general economic
situation in the next 12 months.

 (Reporting by Michael Nienaber,
Editing by Joseph Nasr)
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