German forward-looking confidence indicator rose to 6 points for March from 5.9 in February, despite country's Q4 economic contraction, continuing its slow but steady upward trend: GfK

Cindy Allen

BERLIN , February 28, 2012 (Associated Press) – German consumer confidence continues to edge higher as a healthy job market boosts hopes of higher incomes, a survey showed Tuesday.

The GfK research institute said Tuesday that its forward-looking confidence indicator was up to 6 points for March from 5.9 in February — continuing its gradual upward creep of recent months. The increase comes despite recent confirmation that Europe's biggest economy shrank, albeit by a modest 0.2 percent, in last year's final quarter.

GfK says that consumers' economic expectations were slightly lower this month as the European debt crisis continued to simmer. Their willingness to buy also slipped, though it remained high.

The survey found that Germans were markedly more optimistic about their income prospects this month, and hopeful of "noticeable increases" in upcoming wage negotiations.

Germany's labor market is buoyant, and unemployment stood at 7.3 percent in January — far lower than in many other European countries.

Germany's economy has generally outperformed much of Europe over the past couple of years. Many economists believe that the contraction in the last three months of 2011 was a one-time blip that won't lead to a recession, or two consecutive quarters of negative growth.

ING economist Carsten Brzeski said GfK's overall consumer confidence rating was at its highest since last March, and the latest increase "bodes well for a further stabilization of private consumption throughout 2012."

"Greek crisis, high fuel prices — it looks as if nothing can shatter German confidence," he said.

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