German consumer sentiment is set to worsen slightly in March as the spread of the coronavirus has contributed to uncertainty among consumers, market-research group GfK said Thursday.
A decline or halt in production in companies in China could affect production in Germany or even cause it to come to a complete standstill and this could result in reduced working hours and possibly reductions in staff, something that "would not be of benefit to consumer confidence," said Rolf Buerkl, consumer expert at GfK.
GfK’s forward-looking consumer sentiment index is set to fall to 9.8 points in March from 9.9 points for February, GfK said. Economists surveyed by The Wall Street Journal forecast 9.8 points in March.
GfK uses three sub-indexes for the current month to derive a sentiment figure for the coming month. In February, both income expectations and propensity to buy went down. Economic expectations, however, gained slightly for the second consecutive month, supported by encouraging signals from the German labor market, GfK said.
"Employment remains largely stable, though the momentum seen in recent years is a thing of the past," GfK said.
The economic-outlook measure rose to 1.2 points in February from minus 3.7 points in January, GfK said.
On the other hand, income expectations declined, falling to 41.2 points in February from 44.6 points in the previous month. The market-research group, nevertheless, said the indicator was still at a good level, supported by a stable labor-market situation.
The propensity-to-buy measure went down to 53.6 points in February from 55.5 points in January, maintaining a very high level, GfK said.
"Consumer confidence has so far remained unaffected by weaker economic conditions, trade conflicts and the coronavirus," GfK said.
GfK added that the European Central Bank’s monetary policy is an important support for the propensity to buy.
Write to Maria Martinez at [email protected]
Dow Jones Newswires
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