Consumer climate top in December 2006

According to a consumer climate study conducted by GfK the consumer climate reached its 2006 top level in December. There is markedly strong confidence in good economic development. After a slight increase in November the confidence rose strongly in December. The respective indicator rose by 25.4 to 35.7 points which is the highest level in almost six years. Only in January 2001 the indicator were even higher. Compared to December 2005 the indicator rose by almost 24 points.

The experts of the GfK believe that the strong confidence in economic upswing is a sign of the upswing´s sustainable nature. In particular the significantly improved situation on the labour market seems to increase consumer confidence in a stable economic development. Less optimistic expectations as regards wages and salaries are attributed to the imminent drastic tax increases. According to the experts these increases also have adverse effect on the consumer climate at the beginning of 2007.

A comparison of East and West Germany shows that the consumers in the East are less optimistic than those in the West. Thus, in the new German federal states the weakening of confidence with regard to salaries and investment is much more dramatic than in the West. For the same reason the confidence in the economic development is much less strong in the East.

According to the study the optimism is particularly marked among the upper social strata and the middle class. GERMAN