Weak world economy saps German consumers' mood

[FRANKFURT] Germany can expect slightly less cheerful consumers in November, a monthly study from market research firm GfK said on Wednesday, as reports of weak global growth made themselves felt.

The survey of around 2,000 people forecast a slight fall in GfK's headline consumer confidence index to 9.7 points, from 10.0 in October.

Analysts surveyed by Factset had predicted that the indicator would hold steady.

"The weakening of consumers' mood in Germany has less to do with hard economic facts at home and is more a consequence of the more difficult external economic environment," the pollsters said in a statement, as forecasts predict global growth "will remain weak".

Consumers' expectations for the future rose slightly after three consecutive falls however, with GfK suggesting that "consumers seem to have digested the decision of the British to leave the European Union" in June.

The firm also pointed to boosted government forecasts for growth in the German economy and growing employment and private incomes as reasons for the increase.

But consumers' expectations about their own income and inclination to make purchases both fell back.

The public's cautious outlook stands in contrast to businesses' newfound optimism.

A survey from the Munich-based Ifo institute on Tuesday showed that companies were more confident than at any time since April 2014 in October, continuing a recovery from July and August's post-Brexit plunge.

Regardless of the mismatch, GfK predicted that "private consumption will make a decisive contribution to economic growth in Germany this year".

AFP