German Consumer Sentiment Set to Remain Flat in October -GfK
September 23 2020 - 1:29AM
Dow Jones News
By Maria Martinez
German consumer sentiment is set to stabilize in October,
following a clear downturn in the previous month, market-research
group GfK said Wednesday.
GfK's forward-looking consumer-sentiment index is set to rise to
minus 1.6 points in October from a revised minus 1.7 in September.
Economists surveyed by The Wall Street Journal had forecast minus
0.5 points for October.
Despite rising infection figures and the increasing fear of
tighter restrictions caused by the pandemic, the consumer climate
has stabilized, GfK said.
"The extensive support packages for business and consumers are
clearly suitable measures to help Germany emerge from the worst
recession since the war," said Rolf Buerkl, consumer expert at
GfK.
GfK uses data from three subindexes from the current month to
derive a sentiment figure for the coming month, measuring economic
expectations, income expectations and propensity to buy. In
September, both economic and income expectations are on the rise,
while propensity to buy has taken a hit.
Consumer income expectations are currently making a significant
contribution to the stable development of the consumer climate,
rising to 16.1 points in September from 12.8 points in August.
Economic expectations rose for the fifth time in a row, standing
at 24.1 points in September from 11.7 points in August.
"Consumers think that the German economy is clearly on the road
to recovery after the sharp decline in spring due to coronavirus,"
GfK said.
A stable labor market and the falling number of short-time
workers support the rising economic optimism but GfK warned that
for sustained growth, it is also necessary for exports to recover
significantly.
On the other hand, the propensity to buy stalled after four
consecutive rises. The indicator dropped to 38.4 from 43.7 in
August.
"The further course of the infection rate in Germany and the
situation in the labor market will decide whether the previous
month's downturn remains a flash in the pan and whether consumer
mood is able to recover in the coming months," Mr. Buerkl said.
Write to Maria Martinez at maria.martinez@wsj.com
(END) Dow Jones Newswires
September 23, 2020 02:14 ET (06:14 GMT)
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