October 21, 2016

No Brexit Blues For German Consumers: Survey

Consumers’ expectations for the whole economy were lower than in July.

There was little sign of Brexit uncertainty in a monthly survey of German consumers on Friday, with the public’s mood almost unchanged in August compared with July.

Market research company GfK’s headline consumer sentiment index fell slightly to 10.0 points in August, after a 10.1-point reading in July.

The score was slightly higher than expected by analysts surveyed by Factset, who had forecast a larger fall to 9.9 points.

Sentiment “developed positively overall, and apparently digested the Brexit shock well,” the pollsters wrote in a statement.

Consumers’ expectations for the whole economy were lower than in July.

GfK said the fall in that sub-index could partially be due to three violent attacks in Bavaria — two of them claimed by jihadist group Islamic State — that “could have caused slightly increased uncertainty.”

But the respondents’ expectations about their own income leapt upwards, rising to 58.3 points in August compared with July’s 49.7.

There was a smaller rise in consumers’ readiness to spend money.

Germans “are almost euphoric regarding their own financial situation,” the researchers wrote, with an appetite to buy “unbroken in the face of the Brexit decision and the danger of terrorism.

“Signals are all on green for consumption,” they went on, pointing to recent positive data on incomes, employment and inflation.

GfK expects a slight increase in the headline index for September, to 10.2 percent.

Its results for August stood in sharp contrast with the Ifo economic institute’s closely-watched business confidence index, which fell Thursday over Brexit fears.

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