The luxury segment in Germany is booming

The luxury segment in Germany is booming thanks to its considerable strengths. High quality, technological innovation and unique design demonstrate the expertise of luxury companies and their employees. These virtues are paying off: all market segments grew substantially in the last half of 2012.

The outlook for the next six months is very positive too: 62% of company directors in the industry expect substantial sales growth in the first half of 2013. Almost one in two thus intends to hire more staff (48%) and invest in marketing (45%). One in three generally expects investment budgets to rise. Compared to other countries, Germany is a key growth market, with 55% of companies based there seeing better sales in Germany than in other markets.

Those are the key findings of a survey of 60 senior managers from leading companies for the first MEISTERKREIS index. This index tracks the mood in the German luxury segment and from now on will be conducted twice a year by MEISTERKREIS in collaboration with Roland Berger Strategy Consultants. In addition to market and sales development, the index evaluates aspects such as profitability and investment.

Munich, 02/25/2013 |InternationalTradeNews| (Fragment)

Germany’s economic boost

According to GfK forecasts, spending of private households in Germany will increase by 1 percent in real terms in 2013. This was announced by Matthias Hartmann, CEO of GfK, at today’s press conference in Nuremberg. Private consumption is therefore making a stable contribution to the German economy.

In light of low interest rates and concern about the future of the euro, consumers are tending to make high value purchases. Moderate growth is forecast for retailers. German consumers have started 2013 in positive spirits. All indicators of the GfK Consumer Climate were on an upwards trend as the year began. Although economic development noticeably slowed down in winter 2012, for consumers the turning point has seemingly been reached. Economic expectations are currently improving. This assessment of consumers is also shared by business, as demonstrated by the Ifo Business Climate Index, which increased for the third consecutive time in January.

Buoyed by the positive situation on the labor market, German consumers are expecting their income to increase in the near future. The perceived job security is giving consumers the necessary planning security for making major purchases. At the same time, savings and loan interest rates are at a record low. This is above all benefiting the real estate sector, which is proving to be a safe haven in which consumers can invest their savings. According to an estimate from the Ifo Institute, the number of completed homes increased by around 17 percent last year. GfK data attests to an increase of around 7 percent in spending on renovation. Concern about the future of the euro is also enhancing this trend. The former German ‘fear-driven savers’ have now in part developed into ‘fear-driven consumers’.

|Fragment of International Trade News|