German consumer sentiment marginally improved in October, but global trade frictions, Brexit uncertainty and mounting domestic job losses dampened the mood for November, data from market research firm GfK showed.
The consumer climate index ticked up month over month to 9.8 points in October, but was projected to fall to 9.6 points in November, making it the lowest level in three years. The October print was revised down from a prior estimate of 9.9 points.
Economic and income expectations and propensity to buy dipped, the survey said. Meanwhile, a number of automobile manufacturers and their suppliers have announced redundancies in the face of a global economic slowdown, which will impact export-oriented Germany.
"Nevertheless, private consumption will remain an important pillar for the German economy this year," GfK noted.
The indicator for propensity to buy fell 3.4 points to 51.7 points.
The research firm said the European Central Bank's low-rate policy encourages the propensity to consume, though it has been hurting banks.
Income expectations fell 7.8 points in October to 39.0 points, marking the lowest value in about six years, while the economic outlook dropped 4.8 points to negative 13.8 points, which is slightly above a near seven-year low of negative 14.0 points.
The German federal government lowered its GDP growth forecast for 2020 to 1.0% from a previous estimate of a 1.5% expansion but ruled out crisis fears. Deutsche Bundesbank said in its latest monthly report that Germany's economic output may have slightly declined again in the third quarter amid a continued slump in the country's export-oriented industry.
German business sentiment remained unchanged in October from September, amid an improving business outlook and easing manufacturing woes, according to a survey by the ifo Institute. Previously, research institute ZEW said Germany's economic outlook worsened in October from the prior month.