Consumer climate on the up

Findings of the GfK consumer climate survey in November 2003 Nuremberg, Germany

(ots) - German consumers appear to be getting in the pre- Christmas spirit, expressing hope that the economy is finally recovering and that their personal finances are improving. In view of this slightly more positive mood in November, retailers may yet be pleasantly surprised by their Christmas sales.

Like the financial analysts (ZEW) and companies (ifo), consumers are once again displaying more optimism in November with regard to the economy and their personal expectations of income and planned purchases. For the first time in months, all of the consumer mood indicators have improved, increasing the overall consumer climate indicator more than in previous months.

It would, however, be premature to speak of a far-reaching trend towards making larger purchases. The situation is more delicately balanced than that and could easily tip back to that of previous months. Apart from the uncertainties resulting from the debate about political reform, it is mainly high unemployment that is preventing consumers from completely abandoning their purchasing reticence.

Outlook for the consumer climate: gradual upward trend

The positive development of all the consumer indicators is a clear sign that the consumer climate is improving further. The indicator for December is predicted to reach a value of 5.7 points. This will only be an increase of 0.3 points on November, but the probability of improved trade in the run-up to Christmas is still higher than has been assumed in recent months.

The next few weeks should provide an indication of whether pre-Christmas optimism with regard to an economic upturn and consequently a revival of the labour market proves to be founded.