ZCZC
BCN-34
GERMANY-CONSUMER-SENTIMENT
German consumer sentiment weakens in November
BERLIN, Nov. 29, 2018 (BSS/Xinhua) – Consumer sentiment in Germany has
deteriorated slightly during the month of November, a study published on
Wednesday by the GfK market research institute finds.
“Overall, consumer sentiment in Germany showcases a more moderate image in
November,” a statement by GfK read.
According to the study, the proclivity of Germans to spend on consumer
goods rose once again from the already high level of the previous month.
However, this positive effect was more than offset by dampened growth and
income expectations held by consumers, as well as an increased propensity to
save.
GfK consequently predicted that its consumer sentiment barometer would fall
by 0.2 percent to 10.4 percent towards the end of the year. The findings were
based on a regular survey of around 2,000 respondents which has been
conducted by the Nuremberg-based institute since 1980.
The monthly fall in consumer sentiment was largely attributed to a
weakening of economic momentum in Germany, resulting in the second
consecutive decline in growth expectations to 17.4 points (minus 1.6 points)
observed in the survey. GfK noted that, consumers were also markedly more
pessimistic about the prospects of the German economy compared with the same
period last year (minus 26 points).
Official figures published by the Federal Statistical Office recently
revealed that German gross domestic product (GDP) declined for the first time
since early 2015 by 0.2 percent in the third quarter (Q3) of 2018. The
government statisticians identified the primary cause of the quarterly
recession in falling exports and logistical issues stemming from the
introduction of a new certification process in the European automotive
industry.
In light of this trend, GfK cautioned on Wednesday that an ongoing trade
conflict between the European Union (EU) and the United States was “not yet
conclusively resolved.” Combined with uncertainties stemming from the looming
departure of the United Kingdom from the bloc, a resulting threat of German
exports being impeded by new tariff barriers continued to weigh on consumer
sentiment.
Furthermore, the market research institute emphasized that its indicator
for income expectations was at its lowest level measured so far in 2018 with
50.2 points (minus 4.2 points). Annual inflation had risen rapidly to 2.5
percent in October, resulting in less disposal income for spending by
consumers.
Nevertheless, the indicator still remained at a “very good level” in
historical terms thanks to a booming German labor market characterized by
record low unemployment and record high employment.
BSS/XINHUA/HR/1500