German consumer morale brightens further heading into June

Morale among German consumers improved heading into June, helped by a growing willingness to make purchases, a survey showed on Wednesday.

The GfK consumer sentiment indicator, based on a survey of 2,000 Germans, edged up to 10.2 from 10.1 a month earlier.

This was the highest level since 11.0 in October 2001 and beat the Reuters consensus forecast for 10.0.

"The very robust domestic demand in Germany and the low rate of inflation is once again helping lift both the economic expectations and the willingness to buy," Rolf Buerkl, a researcher for Nuremberg-based GfK, said in a statement.

Private consumption has eclipsed exports as Germany’s main engine of growth with record-low unemployment, bumper wage deals and ultra low interest rates making consumers more willing to open their purse strings.

After a slight dip in last month’s readings, German consumers’ willingness to buy improved further in May while their economic expectations also brightened.

However, a sub-index measuring personal income expectations slipped this month as rising energy prices stoked consumers’ expectations for higher inflation. It remained at a high level, nevertheless.

Buerkl said consumers remained unaffected by the ongoing Greek debt crisis, but he warned uncertainty over the country’s future in the euro zone as well as conflicts in Ukraine and concerns over Islamic State could dampen the mood.

Reuters