Germans Look to Buy Now

German consumers are more optimistic than at any time since the end of 2001, before the introduction of the euro, according to the GfK MAXX consumer climate study for April 2006. They are also looking to make major purchases before the scheduled rise in VAT.

Following the upward revision of 5.3 points in April, the overall consumer climate indicator forecast for May is 5.5 points.

GfK says the impending increase in VAT, the forthcoming World Cup and faith in economic revival are having a particularly strong effect on the propensity to buy indicator, up another 15.0 points this month following a rise of 7.6 last month and now at 34.5, just four points shy of the post-Reunification high of April 1999. The rise comes despite the fact that assessments of the prospects for personal income are not very positive.

Consumers in the former West Germany have followed those in the east whose propensity to buy rose strongly last month. Those in the former East German states remain more negative than those in the west in terms of their views on economic prospects and personal income expectations.

The index for expectations regarding the economy is now 37.8 points above the corresponding figure for the previous year. GfK cites the continuing robustness of the world economy and the fullness of order books as key reasons for greater confidence in economic growth this year.

Expectations of consumers regarding their personal income situation did not, however, keep pace with the positive trend in the other mood indicators in April. They fell for the second month running, by 1.5 points to - 0.5, roughly the same level as the previous year.

GfK conducts around 2,000 consumer interviews each month on behalf of the EU Commission. The next publication date will be May 29, 2006. The firm is online at www.gfk.com .

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.

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