German consumer sentiment is set to improve in March as the refugee issue still doesn’t seem to have had a major impact on the country’s citizens, while the solid labor market provides a strong background.
Market research group GfK’s forward-looking consumer sentiment indicator is set to be 9.5 points in March compared with 9.4 points in February, it said. Economists in The Wall Street Journal’s survey forecast a reading of 9.3 points.
GfK said a major reason for this optimistic outlook is the continued “excellent state” of the German labor market.
“The February findings of the survey indicate that the intensive discussions to achieve a permanent solution to the refugee issue are still not having any impact on German citizens,” GfK said. “It is clear that even the continued acute terror threat has done little to sway consumer confidence.”
GfK uses three sub-indexes to derive a sentiment figure for the coming month. In February, there was a noticeable rise in income expectations, to 56.7 points from 47.2 points in January, but hardly any change in economic outlook, while the propensity to buy sub-index remained unchanged.
The rise in the consumer confidence index is in contrast to German business sentiment, which deteriorated for the third month in a row in February. The Ifo business climate index fell to 105.7 in February from 107.3 in January, to its lowest level since December 2014. The figure was below economists’ expectations in The Wall Street Journal’s poll for a smaller decline to 106.7.