The positive sentiment among German consumers appears to have reached its peak in the late summer of this year. Consumers now consider the outlook for the economy to be rather more pessimistic than in the prior month. Expectations regarding their personal financial position are equally conservative. Only the inclination to make larger purchases in the near future remains high.

As a result of the high level of the propensity to buy indicator, the consumer climate is slightly up again on the prior month. After the revised figure of 8.5 points, in August the indicator is forecasting 8.6 points for September.


Based on the indicator values, GfK is forecasting a rise in private consumption in 2006 of 0.7% compared to the prior year.


Uncertainty regarding future economic development in Germany is increasing among consumers. In August, the indicator dropped a good 4 points compared to the prior month and now stands at 11.4 points. This is 23 points higher than in August 2005.


Income expectations in August remained unchanged on the prior month. As before the indicator stood at minus 3.8 points and was therefore below the long-term average of zero. Compared to the prior year, the indicator is almost 7 points higher.


The inclination of consumers to make larger purchases in the near future remains extremely positive in August as well. However, the indicator was 1.4 points down on the previous record month of July. At 56.1 points, however, this is the second highest figure ever recorded. The indicator is over 60 points higher than the same month in 2005.


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