BERLIN: German consumer confidence is set to improve further in May but some sub-elements of the index are showing tentative signs that consumer optimism may be approaching its peak.
The forward-looking GfK consumer-sentiment index is set to rise to 10.1 points in May from 10.0 points in April, market research group GfK said Thursday, marginally undershooting economists’ expectation of 10.2 points in a survey by The Wall Street Journal. The May data is the highest value since Oct. 2001, when the indicator was 11.0 points, GfK said.
The consumer climate in Germany is therefore maintaining its upward trend, albeit with slightly less momentum,” GfK said.
GfK uses data from the current month to derive a figure for the forthcoming month.
The income expectations sub-index for April rose to 55.1 points from 53.1 points in March, reaching the highest level since German reunification. Very low inflation and a solid labor market support these expectations.
Sound developments in the employment situation have resulted in a greater potential for [pay] rises, ” GfK said.
The two other sub-indices, meanwhile, showed some signs of consolidation. Economic expectations for April fell to 35.3 points from 36.8 points in March.
It is possible that consumers are beginning to respond to the continued uncertainty on the future of Greece, especially a potential Grexit,” said GfK, with “Grexit” referring to the possibility of Greece leaving the eurozone.
The willingness-to-buy sub-index fell to 58.3 points from 63.0 points, GfK said, nonetheless remaining relatively close to the record value of 64.4 points reached in October 2006, just before an increase in value added tax.
