The findings of the GfK Consumer Climate Survey for September 2005 shows that the election battle and the clashes in the run-up to the German elections, combined with the hike in oil prices, have had a further negative impact on the consumer mood in Germany.
After an increase in August, the income expectations indicator recorded was down in September 1.1 points to -11.7. While the losses are modest, the fluctuation of the indicator recorded over the last year and a half is persisting and the consumer mood regarding income remains subject to considerable uncertainty, according to GfK.
The increase in the propensity to buy, evident in the previous 2 months was halted in September, with the indicator losing 8.9 points and the sharp rise of the previous month outstripped. The indicator stands at -13.4 points.
Following a rise in August, the consumer climate has shown slight downward movement again. The indicator forecast for October stands at 3.1 points, following a revised figure of 3.3 for September, according to the results of the survey. All indicators point to domestic German demand remaining very weak in 2005, providing virtually no tangible impetus for macroeconomic growth.
The outcome of the German elections is expected to give rise to complicated and possibly lengthy negotiations on creating a stable government. The population, GfK says, is waiting for clear signs from companies and the government, delaying a long-awaited turnaround in the labor market and employment situation.
The consumer expectation concerning the general economic trend is the only good news in the report. After an increase of a good 4 points in August this year, the indicator has now risen by more than 7 points to stand at -4.5.
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