Look at the headlines of the last few weeks, and you could be forgiven for thinking it’s all doom and gloom. It would appear the world can no longer rely on the US consumer bailing us all out. What we need is for the likes of Japan and Germany to start spending. And as that’s not very likely, some have started to panic – and maybe that’s fundamentally what’s behind the recent market slides.
But then yesterday, the nigh on impossible seemed to happen. Evidence suggested that Germany is about to boom. According to research company GfK, German consumer sentiment is now at its highest level since June 2001.
And if you are in the business of supplying more expensive items to the German market, here’s some more good news The GfK indicator for this sector rose to a record high.
But before you open the champagne to celebrate, think twice, and perhaps settle for something cheaper- Liebfraumilch, perhaps.
The spending season could be short lived. First of all much of the expense is simply down to an impending change in VAT. Germans consumers are spending now before prices go up. And then, of course, there’s the World Cup. Once this is over, then the fear is things will go back to normal.
A football inspired feel good factor could lift the German economy, say some. But England only have to repeat the 5 to 1 victory they achieved the last time they played in Germany, and the feel good factor could be replaced by the feel rotten factor.
Consumer climate: propensity to buy reaches new highGfK

© Investment & Business News 2013