Consumer climate: caution still prevails / Findings of the GfK consumer climate survey in May 2004

Nuremberg, Germany (ots) - Following a slight upward trend in April, May has seen the consumer climate return to the downward trend of previous months. German consumers appear to be doubting the ability of politicians and commerce to boost economic activity, which would provide new impetus for the labour market. This is what the key consumer climate indicators including economic outlook, income expectations and propensity to buy suggest, all of which suffered losses in May.

Consumer expectations with regard to economic growth in Germany, which showed an upward trend in April, have deteriorated again. The indicator was down by 10 points on the previous month, and now stands at -18. A lower figure was last seen exactly one year ago in May 2003.

Consumer uncertainty is particularly evident when it comes to income expectations. Since June 2003, this indicator has seen huge fluctuations. A rise in one month is immediately followed by a fall in the next. Accordingly, following an upturn in April, income expectations were clearly down again in May by 10 points.

In the wake of falling income expectations and the negative economic outlook, the propensity to buy also experienced a considerable setback this month. At -41.1, the indicator is more than 14 points down on the previous month.

In view of current developments with the consumer mood deteriorating, the consumer climate is likely to show a slight downturn. The consumer climate indicator for June 2004 is forecast at 4.5 points (following a revised 4.7 points in May).

The high level of unemployment, which is still rising, and the discussion surrounding additional resolutions regarding the treatment of savings mean that no impetus for economic growth can be expected from private consumption.