Consumer confidence in Germany, Europe's largest economy, is set to improve further in September, reaching its highest level in almost 16 years, market research group GfK's monthly survey showed on Tuesday.
GfK's forward-looking consumer sentiment index is set to rise to 10.9 points in September, from 10.8 points in August, GfK said. Economists in The Wall Street Journal's survey expected a 10.8 point reading.
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The index has increased for the fifth consecutive month and the level is the highest since October 2001, and "with it, the consumer mood in Germany remains on a stable course for growth," GfK said. It added that the "very positive" employment situation in Germany is and remains the most important factor for the good consumer mood which allows Germans to be "somewhat riskier" in financial dealings and make larger purchases which could also involve credit.
GfK uses three sub-indexes for the current month to derive a sentiment figure for the coming month. One of the three has, however, fallen in August.
The economic expectation sub-index fell to 30.4 points in August, from 44.6 points in July, but GfK emphasized that the indicator maintained a good level overall. GfK attributed the drop to citizens' possible worries whether the exporter country can show as dynamic development as up to now given diesel automobile and several other crisis flash points.
Income expectations, meanwhile, increased to 61.4 points in August from 60.9 points in July, reaching a new post-reunification high.
Consumers' propensity to buy, which shows their willingness to spend on big-ticket items, rose to 58.1 points in August, from 54.8 points in July, GfK said.
Despite the positive signals for consumption in Germany, GfK noted that possible risks to consumption are more likely to be of international origin rather than coming from the domestic market.
Write to Emese Bartha at email@example.com
(END) Dow Jones Newswires
August 29, 2017 02:14 ET (06:14 GMT)