- Findings of the GfK Consumer Climate Survey for June 2006

The consumer mood in Germany continued to improve overall in June. This
was primarily attributable to the further slight increase in the
propensity of consumers to make major purchases in the near future.
However, German consumers view economic growth and their own income
situation with greater scepticism than in the previous month. Following a
revised 7.0 points in June, the forecast for the consumer climate
indicator in July is 7.8 points.

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Following the improvement experienced over the last two months, consumers'
economic expectations slumped by 10.5 points in June. The income
expectations indicator plunged from a good 14 points to minus 8.9 points.
In contrast to the economic and income expectations indicators, the
propensity to buy indicator climbed a further 4.4 points in June, reaching
54.2 points. This is again the highest level recorded since GfK began its
monthly consumer climate surveys in 1980. Following the revised 7.0 points
in June, the forecast for the consumer climate indicator in July is 7.8
points.

In view of the uneven development of the consumer mood indicators, it is
still uncertain whether the current upswing in the consumer climate
signifies a sustainable change in the overall trend. The drop in economic
and income expectations indicate a possible further decline in the coming
months. As long as consumers view their future financial outlook with
scepticism, their current very positive propensity to buy is on shaky
ground. In particular, there is a lack of clear signals from the labour
market regarding this matter.

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