Cool consumer climate for autumn / Findings of the GfK consumer climate survey in October 2003

Nuremberg (ots/APROTEXT) 30.11.2003 - As the temperatureshave fallen in October, so the consumer mood also seems to havecooled again. Consumers currently have low expectations ofgeneral economic development and their own finances, and areremaining reticent when it comes to making purchases.

On the economic development front, consumer expectations inGermany remain low. With -10.5 points in October, the indicatoris almost down to the previous month's level of -10.6. Thepositive impetus in June to August, when the economic outlookindicator rose by nearly 20 points, is nowhere to be seen inOctober. Compared to October 2002, the indicator is down by 12points. Following consumers' optimistic assessment of theirpersonal finances in September, the consumer mood cooled onceagain in October. Income expectations have been fluctuating inrecent months, with consumers evidently not knowing what thefuture holds in terms of future income. At -6.9, the indicatorwas up by a good 6 points in October, more than compensating forthe 5-point rise of the previous month.

Against the backdrop of stagnating economic and incomeexpectations, it is hardly surprising that consumers see noreason to stray from the reluctance to buy which has beenevident for nearly two years now. Despite the slight recovery(0.7 points) of the buying propensity indicator in October, with-30.9 points, the indicator remains at a very low level. Eventhough it is slightly up on the previous year's level, theoverall low value is not very promising for retail in the nextfew months.

The current development of the consumer indicators suggeststhat the general consumer climate indicator is stagnating. It isset to reach 5.2 points in November, which, although 0.1 pointsup on October, is far too low to trigger any positive change.

Once the German government announced that the tax reform wasto go ahead, consumer expectations regarding their incomeimproved dramatically. However, the more discussion on thefinancing of tax reform, the more consumer hopes of a potentialeasing of the income situation began to fade, being replaced byfears of additional strains. At the moment, consumers arecompletely in the dark as to what changes there will be to theirincome situation at the beginning of 2004. As it is likely to bethe end of the year before the financial consequences of thereform plans currently being discussed become clear, the topicsof consumer climate and consumption recovery may unfortunatelybe in hibernation. ots Original Text Service: GfK Internet:http://www.presseportal.de More information: Ulrike Schöneberg, phone +49 (0)911 395-2645, ulrike.schoeneberg@gfk.de

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