Rising Salaries Opt Germans to Spend More

German consumers are heading into the autumn with a sunny summer disposition, expecting to spend more of their rising incomes as Europe’s biggest economy continues powering on.

The pollsters of Germany’s consumer research group GfK have found that the country’s population is looking into the future with a strong sense of confidence, which caused the group’s consumer confidence index to edge up by 0.1% for September, DW reported.

The forward-looking gauge—based on a poll of about 2,000 Germans—hit 10.9 points for the month, rising for the fifth straight month and hitting its highest level since October 2001.

“Germans see the domestic economy continuing on an excellent path,” the pollsters commented in a statement, adding that they would remain in a “perfect mood to spend” as a result.

Looking in detail at the results, consumers’ expectations for their own income hit a new post-1991 record, while people’s readiness to make large purchases also rose compared with the previous month. This comes against the background of record high levels of employment dimming workers’ fears that they might lose their jobs, GfK suggested.

But the public’s expectations for the state of the German economy in the coming months fell back, dropping 14.2 points to settle at 30.4. Respondents may have been unsettled by rumbling fears for the future of diesel-powered cars, GfK said, as well as worries about the future of free trade and smoldering conflicts around the globe.

In other indicators for the German economy, the ifo Institute’s closely-watched business confidence index remained near record highs in August. But the ZEW institute’s investor confidence survey fell back this month, with analysts suggesting the drop had more to do with the rising value of the euro against other currencies rather than fundamental fears for the German economy.

“The German economy is now firing on all cylinders,” Rolf Burkl, a researcher at GfK, said in a statement recently, with consumers also expecting further improvements over the remainder of the year.

The survey showed that consumers have shrugged off global worries, including Brexit negotiations, US President Donald Trump’s protectionist “America First” stance and tensions between Germany and Turkey.

At 5.5%, German unemployment is at a record low, while weak inflation and historically low interest rates have helped boost consumer confidence.

Germany’s manufacturing economy is also in good health, anticipating a surge in already robust exports.