German consumer confidence to rise after World Cup
Published 27/07/2010 | 11:24
German consumer confidence will rise in August after economic growth accelerated, unemployment dropped and the country placed well in the soccer World Cup, GfK AG said.
GfK’s consumer sentiment index, based on a survey of 2,000 people, will climb to 3.9 from a revised 3.6 in July, the Nuremberg-based market research company said in a statement today.
Economists expected the index to remain unchanged at this month’s initial reading of 3.5 points, the median of 25 estimates in a Bloomberg News survey shows.
German business confidence unexpectedly surged to a three- year high this month and growth in the service and manufacturing industries accelerated, suggesting the recovery in Europe’s largest economy is gathering pace.
Warm summer weather and Germany’s third placing in the World Cup soccer tournament have also lifted consumers’ spirits, GfK said.
“The good performance of the German team as well as the sunny weather have put people in a good mood,” GfK said.
“Combined with unexpectedly positive news from the labour market, consumers not only expect the recovery of the German economy to continue, they expect it to gain further momentum.”
Unemployment fell for a 12th straight month in June as companies ramped up production to meet booming export orders.
Gfk’s measure of economic expectations jumped to 36.8 in July, the highest since October 2007, from 5.5 in June.
A gauge of income expectations surged to 29.1 from 8.2, while an index of consumers’ willingness to spend eased to 27.9 from 30.4, which GfK said is still well above its long-term average.
German clothes retailer Hugo Boss enjoyed “clearly better” business in the second quarter and continues to expect growth in sales this year, Boersen-Zeitung reported on July 23, citing Chief Financial Officer Mark Langer.