German consumer morale is set to end five months of decline and stabilise in April as households' view of the economy brightens, the GfK market research group said today.
The GfK consumer sentiment indicator, based on a survey of 2,000 Germans, held steady at 3.2 going into April from the same reading for March. Economists polled by Reuters had forecast the reading to drop to 3.1.
Measures of households' income expectations and the overall economy improved for April, the GfK survey showed, although their readiness to buy major items declined.
"The labour market still appears surprisingly robust this year," GfK economist Rolf Buerkl said in a statement. "This stability, along with stronger signals of recovery, is allowing Germans' view of the economy to improve."
The German economy, Europe's largest, emerged from its deepest post-war recession in the second quarter of last year before stalling in the final three months of 2009.
Indicators covering the first quarter have suggested the economy struggled to grow at the start of the year, but the latest forward-looking surveys point to a more durable upturn.
The purchasing managers index (PMI) survey released yesterday showed manufacturing output growth surged ahead in March while service sector activity also picked up.
Business sentiment jumped in March to its highest level since June 2008, a closely watched survey by the Ifo think tank showed yesterday, suggesting the economy is gaining strength after stagnating over the winter.
"The view of consumers is also shared by German companies at the moment, as the Ifo business climate index in March has clearly risen as well," Mr Buerkel said.
GfK's gauge of consumers' income expectations rose to 13.5 in March - the first month for which sub-component data is available in the survey - from 12.0 in February.
The sub-index of business cycle expectations increased to 4.5 from -5.6 in the previous month, but the measure of consumers' willingness to buy fell to 23.4 from 24.2.
Reuters