BERLIN Dec 23 The mood among German consumers
improved heading into January as they became more upbeat about
their future income, a survey showed on Friday, suggesting
household spending will continue to propel economic growth at
the beginning of next year.
Private consumption has replaced exports as the main driver
of expansion in Europe's largest economy - a shift helped by
record-high employment, increased job security, rising real
wages, moderate inflation and low borrowing costs.
The consumer sentiment indicator, published by the
Nuremberg-based GfK institute and based on a survey of around
2,000 Germans, rose to 9.9. This was the highest reading since
October and in line with an average forecast in a Reuters poll.
GfK researcher Rolf Buerkl said the survey was conducted in
the first two weeks of December, meaning Monday's deadly truck
attack on a Christmas market in Berlin was not reflected in the
But Buerkl said he did not expect that incident to
significantly impact consumer morale.
"If at all, there could be a dent in next month's survey,
but I don't see a massive long-term impact," Buerkl said,
pointing out that consumers afraid of going out to shop would
tend to buy more goods online instead.
The institute's gauge measuring income expectations jumped
to 55.6 points, its highest level since August.
"The excellent condition of the labour market is awakening
hope that there will be sustained strong growth in wages,"
A sub-index measuring overall economic expectations rose for
the third consecutive month to its highest since June while
willingness to buy edged down.
However, "retailers can probably safely assume that
consumers will continue to flock to the shops in droves and
spend money in the days following Christmas," Buerkl added.
Buerkl said German consumers seemed to be "totally immune"
to a string of external risks, including uncertainties about the
future policies of U.S. President-elect Donald Trump and the
persistently high threat of Islamist attacks.
"It appears as if consumers generally regard labour market
conditions as playing the crucial role in their decision as to
whether to make purchases," Buerkel said.
The government expects private consumption and state
spending to drive an overall economic expansion of 1.8 percent
this year, which would be the strongest rate in five years.
For 2017, Berlin predicts a slowdown in growth to 1.4
percent due to weaker foreign trade and fewer working days.
JAN 17 DEC 16 JAN 16
Consumer climate 9.9 9.8 9.4
Consumer climate components DEC 16 NOV 16 DEC 15
- willingness to buy 48.0 51.2 49.0
- income expectations 55.6 44.5 50.8
- business cycle expectations 16.4 15.3 2.9
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 in
comparison 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 John Stonestreet)