BERLIN (dpa-AFX) - German consumer climate is set to improve slightly in November, ending the downward trend, as income expectations among households strengthened on the back of the strong labor market situation, survey data revealed Friday.
The forward-looking consumer confidence index rose slightly to 8.5 in November from 8.4 in October, a survey based on responses from 2,000 households, published by market research group GfK, showed Friday. The score was forecast to fall to 8.
Private consumption continued to play its assigned job as a key pillar of the economy, GfK said. But, it warned that any escalation in the external crisis will hurt the German consumer climate.
Income expectations and willingness to buy have increased slightly, while almost no change was recorded in economic expectations.
After a dramatic decline in the preceding two months, the economic expectations index slid only 0.1 point to 4.3 in October. It continues to be above the long-term average of zero point.
The market research group said the economic outlook of consumers defied the trend in economic data, which was considerably weaker most recently.
Earlier this month, the government lowered its growth outlook for the economy to 1.2 percent from 1.8 percent. For 2015, growth is projected at 1.3 percent.
The leading German think-tanks also cut their growth forecast for this year to 1.3 percent from 1.9 percent.
The fall in optimism was above all attributed to international crises. The Russia-Ukraine conflict, the escalation of the situation in Syria and Iraq as well as the Ebola outbreak in Western Africa, contributed towards the uncertainty, GfK noted.
Following two consecutive declines in income expectations, an improvement was seen in October. The indicator came in at 46.9 points versus 43.4 in September.
As in previous months, the exceedingly optimistic outlook was attributable to the stable conditions on the German labor market. Despite the weakening economy, GfK expects the unemployment figures to remain steady and said it is even likely there will be an increase in employment to a new record value.
Willingness to buy also benefited from the rising income expectations and the low interest rate level in October. The corresponding indicator rose to 45.6 in October from 42.5 a month ago.
Copyright RTT News/dpa-AFX