German consumer confidence dips from high level
Tuesday, December 21, 2010
BERLIN (AP) — German consumer confidence has slipped slightly from high levels amid expectations that the country’s strong economic growth will ease in the coming months, according to a survey published Tuesday.
The GfK research group said its forward-looking confidence indicator for January stood at 5.4 points — down from 5.5 in December.
A subindex measuring consumers’ expectations for the next year slipped after six months of sharp gains.
That suggests consumers “believe the German economy is well on course for recovery even if they think the unusually strong momentum over recent months cannot be fully maintained,” GfK said.
Germans’ income expectations and their propensity to buy also slipped, although GfK said they remained “at an extremely good level.” All three indicators are far above the levels of a year ago.
The German economy, Europe’s biggest, has rebounded strongly this year as increasing exports into a recovering global economy have been accompanied by signs of improving domestic demand. A separate survey of business confidence has reached levels not seen in two decades.
The upswing has pushed down unemployment, which was kept in check during the depths of the economic crisis by a government-subsidized short-time work plan. It stood at 7 percent in November.
Tuesday’s survey suggests that the broadening of Germany’s recovery will continue next year, ING economist Carsten Brzeski said.
“Driven by the strong labour market, private consumption should pick up further,” he said.
“Despite today’s drop, German consumer confidence remains high and it looks as if German consumers are finally waking up,” he added.
“Even if it will not be a U.S.-type spending spree or a housing-market bubble, it looks as if the ‘being-stingy-is-cool’ mentality could clear the way for a new decent consumption rally in Germany.”
Domestic demand was long a weak point for Germany’s economy, but the national retailers’ association said on Sunday that pre-Christmas business is above last year’s levels.
The HDE group said snowy and icy weather had done little to deter shoppers, though there was a slight dip at the beginning of last week.
The GfK survey is based on monthly interviews of some 2,000 consumers.
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