• Germany edition
 
Wage worries feed German consumer jitters
Photo: DPA

Wage worries feed German consumer jitters

Published: 25 Sep 2012 11:38 GMT+02:00
Updated: 25 Sep 2012 11:38 GMT+02:00

Consumer confidence in Germany is stagnating, market research company GfK said, hard on the heels of data showing the eurozone crisis had pushed down business confidence, setting off recession warning bells.

While the eurozone debt crisis has brought Greece to its knees and caused Spain, its fourth-largest economy, to wobble, Germany has until recently weathered the turbulence relatively unscathed.

But consumers in Europe's powerhouse appeared cautious. GfK said in a statement that its household confidence index was forecast to remain at 5.9 points in October, the same level as September.

While consumers' willingness to spend, and their assessment of the economic situation had improved, they expected their own personal income situation to worsen over the coming months, the GfK said.

The headline consumer confidence ranking is based on responses from about 2,000 households on their expectations about pay and the economy as a whole in the coming months, as well as their willingness to spend money.

On Monday, economists warned that Germany was headed for recession after the eurozone crisis pushed down business confidence in the country to the lowest level since February 2010.

The Ifo economic institute said its closely watched survey of the business climate in Germany dropped unexpectedly in September for the fifth month running to 101.4 points from 102.3 points in August.

Jennifer McKeown, an analyst at Capital Economics, said the data was a reminder that even the eurozone's strongest economies were suffering, which could in turn hit their ability to help weaker neighbours.

"It seems like only a matter of time before the economy starts to contract. This will make support for the peripheral economies even more difficult to muster," she said.

Germany has relied on its powerful export motor to keep the economy humming through the nearly three-year crisis in the 17-country bloc, notching up modest growth of 0.3 percent in the second quarter while the eurozone as a whole contracted by 0.2 percent.

But new car registrations, a key indicator of demand in Germany, tumbled sharply in August. Retail sales figures also declined and unemployment is starting to rise.

The head of the Federation of German Industry (BDI), Hans Peter Keitel, warned the government on Tuesday against putting further stresses on the economy - citing rising energy costs and the push for a transaction tax as just some of the burdens that threaten to put the brakes on economic growth.

For some firms, mounting cost pressure is already being passed on to the consumer. German national rail service Deutsche Bahn announced Tuesday that it will raise prices for passengers by nearly 3 percent starting December 9, due to higher fuel prices.

AFP/DAPD/The Local/arp

The Local (news@thelocal.de)

Your comments about this article

22:45 September 25, 2012 by smart2012
Well done verkel and buba
Today's headlines
UN climate talks shuffle to a close in Bonn
Photo: DPA

UN climate talks shuffle to a close in Bonn

Concern was high at a perceived lack of urgency as UN climate negotiations shuffled towards a close in Bonn on Saturday with just 14 months left to finalise a new, global pact. READ  

Berlin slams Italy Nazi claims court ruling
Italy's National Partisans' Association welcomed the court decision. Photo: DPA

Berlin slams Italy Nazi claims court ruling

Italy's constitutional court has ruled that victims of Nazi-era war crimes can sue Germany in Italian courts, rejecting a UN ruling and provoking a strong reaction from Berlin on Friday. READ  

Expats reveal another side of Berlin Wall
Photo: Paul Sullivan

Expats reveal another side of Berlin Wall

Two expats who walked the Mauerweg - the 160-kilometre trail that runs the length of the former Berlin Wall - have written a book about forgotten aspects of its past and present. READ  

Karstadt closes six stores to stay afloat
Photo: DPA

Karstadt closes six stores to stay afloat

Germany's biggest department store chain Karstadt will close at least six stores, putting around 2,000 jobs at risk, in a drastic bid by its new boss to return it to profit. READ  

Quiz
How well do you know Germany?
Photos: DPA/Shutterstock

How well do you know Germany?

Do you know your Saxony facts from your Saxony-Anhalt ones? Test your knowledge of Germany's federal states in The Local's quiz. READ  

Climate chief hails Bonn greenhouse gas deal
Pollution from a coal-fired power station in Frimmersdorf, North Rhine-Westphalia. Photo: DPA

Climate chief hails Bonn greenhouse gas deal

The UN's climate chief hailed a European agreement in Bonn on greenhouse gases on Friday as providing "valuable momentum" for a world pact to be inked in Paris next year. READ  

Germany gets €780m EU rebate for poor growth
Photo: DPA

Germany gets €780m EU rebate for poor growth

Germany will get an early Christmas present of around €779 million from the EU, thanks to weaker than expected GDP growth. READ  

Stay inside after blast, Ludwigshafen told
Photo: DPA

Stay inside after blast, Ludwigshafen told

It will take several days to find out what caused a massive explosion on Thursday which rocked a town on the Rhine, killing a builder and injuring 26 others. READ  

German helicopter fleet 'not fit for Nato'
An NH90 helicopter. Photo: DPA

German helicopter fleet 'not fit for Nato'

Germany's fleet of NH90 helicopters is undergoing engineering checks after one of them suffered a serious engine failure, in the latest blow to the country's military capabilities. READ  

Ex-boss of Berlin Airport farce gets €1.2m
Rainer Schwarz at a court hearing in September into the case. Photo: DPA

Ex-boss of Berlin Airport farce gets €1.2m

The man who was blamed for Berlin's miserable attempt to build a new airport must be paid more than €1 million - after being fired. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Photo: DPA
Politics
Satirist lives the dream on EU gravy train
Photo: DPA
Gallery
PHOTOS: Huge explosion rocks Ludwigshafen
Photo: DPA/Shutterstock
Gallery
Which high school cliche is your German city?
Photo: DPA
Gallery
Storm hits southern Germany
Sponsored Article
An international school unlike any other : School on the Rhine
Photo: Fitzpatrick family
Society
'We still don't know what happened to Matthew'
Photo: Mariana Schroeder
Munich
Special Report: Hope and chaos at Munich's refugee shelters
Photo: DPA
Culture
Can you top our history quiz leaderboard?
Photo: DPA/Shutterstock
Gallery
11 things Germans are afraid of...
Photo: DPA
Business & Money
JobTalk: All you need to know about working in Germany
National
Share news tips with The Local Germany
Sponsored Article
Bilingual education from nursery to graduation at Phorms
Latest news from The Local in Austria

More news from Austria at thelocal.at

Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Denmark

More news from Denmark at thelocal.dk

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

Latest news from The Local in Sweden

More news from Sweden at thelocal.se

3,524
jobs available
Toytown Germany
Germany's English-speaking crowd