Consumer confidence drops in March

29th March 2004, Comments 0 comments

29 March 2004 , NUREMBERG - Dampening hopes of a German economic upturn, the market research group GfK reported Monday that consumer confidence dropped in March, with Germans increasingly pessimistic about the overall economy and their own earnings. The Nuremberg-based GfK's closely-watched index barely managed to level off at 5.1 points in March, after a rise in February, but two of three sub-areas showed declines. The survey of some 2,000 persons showed that consumers' plans for new purchases levelled of

29 March 2004

NUREMBERG - Dampening hopes of a German economic upturn, the market research group GfK reported Monday that consumer confidence dropped in March, with Germans increasingly pessimistic about the overall economy and their own earnings.

The Nuremberg-based GfK's closely-watched index barely managed to level off at 5.1 points in March, after a rise in February, but two of three sub-areas showed declines.

The survey of some 2,000 persons showed that consumers' plans for new purchases levelled off at February levels. But in the two other areas - expectations about the economy and their own earnings prospects - consumers were more pessimistic than the month before.

GfK chief executive Klaus Wuebbenhorst said the recent debate about jobs being transferred to cheaper-wage countries of Eastern Europe was seen as a factor in the increased pessimism.

"There is a lot of uncertainty," Wuebbenhorst said, with people fearing for their jobs. "This does not exactly support consumption."

The GfK survey was carried out almost entirely before the Madrid terror bomb attacks, so the survey findings were deemed not to have been affected by terrorism fears, he said.

Terrorism as such does not directly affect consumer attitudes, but could play a subconscious role, Wuebbenhorst said, noting it was conceivable that people might postpone their plans for foreign trips.

The GfK findings are the latest damper to the prospects about Germany's economic recovery. On Friday, the Ifo-Institut in Munich reported that business confidence dropped for a second straight month in March.

The Berlin government has been pinning its hopes on private consumption assisting the export sector in getting the German economy going again after two years of virtual stagnation.

But a tax break which took effect at the start of the year has so far not triggered the hoped-for rise in consumer spending. Most recent evidence of this came last week when the KarstadtQuelle retail concern said it was bracing for a four to five per cent drop in revenues in the first quarter of the year.

 

DPA
Subject: German news

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