The positive mood among German shoppers was unchanged heading into December. But, as Sonia Legg reports, a new survey suggests it could be hurt by prolonged uncertainty as talks drag on over the formation of a new government after a September election.
Old habits die hard but thrifty Germans are beginning to feel more confident about spending. The latest survey of 2,000 Germans showed shoppers were in positive mood. GfK's consumer sentiment indicator was unchanged at 10.7 points going into December. (SOUNDBITE) (German) GFK RESEARCHER ROLF BUERKL, SAYING: "We have a consumer climate that is extremely stable. In November there were barely any changes to indicators. We have an excellent labour market and rising employment. That's created significant income growth in households, especially for pensioners. And it's all happened against a backdrop of moderate inflation which also boosts consumer spending." GfK predicts the average German will spend 280 euros on Christmas gifts. That's a total of 14.3 billion euros across the country. It's considered a decent amount But the new survey was carried out prior to the recent political crisis. The euro zone's economic powerhouse currently has no government. (SOUNDBITE) (English): KEN ODELUGA, MARKET ANALYST, CITY INDEX, SAYING: "Even if we were to get agreement today, a substantive coalition would not necessarily be in place until early next year. So you know the delay has been sufficient and I think any longer would be damaging." But income expectation levels are also "very high." So some may be tempted to splash out - even if a new government has been added to a few Christmas lists.