German consumer morale steady heading into August- GfK


German consumer sentiment held steady heading into August as shoppers grew more ready to spend, but took a less upbeat view on the economic outlook than a month earlier on worries about rising numbers of COVID-19 cases, a survey showed on Wednesday.

The GfK institute said its consumer sentiment index, based on a survey of around 2,000 Germans, was unchanged at -0.3 points. The reading compared with a Reuters forecast for 1.0.

After more than two months of steady decline, COVID-19 cases have been rising since early July, due mainly to the spread of the more infectious Delta variant.

“This is currently preventing a further significant increase in consumer sentiment,” GfK consumer expert Rolf Buerkl said in a statement, but he added that the domestic economy would make a positive contribution to growth in the second half of the year.

Roughly 60% of Germany’s 83 million people have had a first shot of a COVID-19 vaccine and about half are fully vaccinated.

A separate survey published on Monday showed German business morale fell unexpectedly in July on continuing supply chain worries and amid rising coronavirus infections, posting its first decline since January.

The consumer climate indicator forecasts the development of real private consumption in the following month.

An indicator reading above zero signals year-on-year growth in private consumption. A value below zero indicates a drop compared with the same period a year ago.

According to GfK, a one-point change in the indicator corresponds to a year-on-year change of 0.1% in private consumption.

The “willingness to buy” indicator represents the balance between positive and negative responses to the question: “Do you think now is a good time to buy major items?”

The income expectations sub-index reflects expectations about the development of household finances in the coming 12 months.

The additional business cycle expectations index reflects the assessment of those questioned of the general economic situation in the next 12 months.