The forecast index edged up to 1.9 points for November from 1.8 points this month, and although that is well below the October 2007 reading of 6.4 points, it was also fairly resistant given the state of financial markets since mid-September, the Nuremberg-based institute said. Consumers' perspectives regarding their personal revenues were measured despite a pessimistic outlook for the economy as a whole, GfK found.
Fears of a recession have been reinforced, in particular by “panic” on international stock markets that has shattered consumer confidence. But although consumers believed their disposable income was set to rise slightly, their propensity to make large purchases was limited, the study found.
The auto and construction sectors were the first to suffer. German automakers have sharply curtailed production in certain cases and issued profit warnings in others.
The GfK study questioned 2,000 people before signs indicating the initial banking crisis was spreading to the wider, real economy and before the German government announced a €480-billion ($590-billion) rescue plan for banks.
Designed to restore confidence in the shaken sector, it might also boost consumer morale.
Since the poll was taken however, global stock markets have fallen further on fears that a global economic recession is at hand. Overall, 2008 will not turn out to be a very good year for German consumers. Hope now resides in 2009, GfK said, but such hope will only be fulfilled if consumer confidence in financial markets returns and if a slide into recession can be avoided.
German business confidence plunged to a five-year low in October, the widely-watched Ifo business climate index showed Monday, as the world's leading exporter was hit hard by the global financial crisis.