German shoppers more downbeat heading into new year

BERLIN: German consumers are slightly more pessimistic heading into January, a key survey found Friday, as fears mount that a global slowdown could trigger job losses in the export-driven powerhouse.

The GfK institute’s forward-looking consumer confidence barometer dipped to 9.6 points, down from 9.7 for December, the pollster said in a statement.

The survey of some 2,000 people found that respondents were more downbeat than last month about Germany’s economic prospects, while income expectations plummeted to a six-year low.

The ongoing US-China and US-EU trade tensions are hanging over Germany “like the sword of Damocles”, GfK said.

“On top of that, global growth is weakening. This has fuelled fears of job losses in export-oriented industries and among their suppliers.”

After years of robust economic expansion, the German government is expecting just 0.5 per cent growth this year, and one per cent in 2020.

The crucial German car industry is particularly vulnerable to external threats, and major automakers like Volkswagen and Daimler have recently announced thousands of job cuts.

Despite the darkening clouds, the GfK survey noted that Germans were still in the mood to shop, buoyed by high wages and low interest rates that discourage saving.

Respondents reported that they were more likely than last month to splash out on big purchases.

Consumer spending remains “a pillar of strength” in Germany despite “an increasingly stormy economic environment”, GfK said.