Change in consumer mood for the better . Findings of the GfK consumer climate survey in February 2004

After two months of predominantly negative development in the indicators which are a barometer of the consumer mood in Germany, it looks as though the trend may be reversing. In January, consumers still felt insecure due to discussions about the reform of the German pension and healthcare systems and recorded largely negative responses.

GfK's February survey indicates a change in mood for the first time. All indicators displayed a clear upward trend: the economic outlook indicator with an increase of nearly 8 up to 2.0 points, the income expectations indicator increased by 14 points up to -0,3, the buying propensity with a plus of 16 points up to -25,7. What is clear is that we are not yet seeing a fundamental change. However, the preconditions for improvement in the consumer mood have become more tangible. All the signs point to this, if consumers' more positive expectations regarding income and also prices are anything to go by. It is also possible that the mood in January was more depressed than the actual situation. According to ConsumerScan panel data, retail in January was no worse than in previous years. German consumers had seemingly stored a lot of frustration relating to the endless discussions about tax and social reforms, which manifested itself in the January consumer mood indicators. By February, emotions had cooled to a normal level. We cannot expect a fundamental improvement until there is a significant rise in the individual consumer mood indicators. This will depend above all on the current economic optimism resulting essentially from exports manifesting itself on the labour market and subsequently on domestic demand

Contact: Dr. Ulrike Schöneberg Tel. +49-911-395-2645 ulrike.schoeneberg@gfk.de