Reuters - Video

Edition: US | UK | IN | CN | JP

video Finance Videos

Confident Germans splash the cash

Monday, March 16, 2015 - 02:25

Sales of new kitchens are up more than 10 percent already this year at German kitchen maker Haecker. As Hayley Platt reports the nation of savers is starting to spend - on everything from soccer shirts at Adidas to electronics from Media-Satrun.

▲ Hide Transcript

View Transcript

Germans are famously frugal. Better known for saving than spending. But recently they've been spotted splashing out on big ticket items like luxury kitchens. German consumer research company GFK reported sales of new kitchens are already up by 10 percent this year. Peter Ramisch is a kitchen salesman. (SOUNDBITE) (German) "SIEMATIC" KITCHEN PLANNER AND SALESMAN, PETER RAMISCH, SAYING: "People simply have more disposable income and therefore tend to spend it, rather than save it." Rolf Buerkl is from GFK. (SOUNDBITE) (English) GFK EXPERT ROLF BUERKL SAYING: "In Germany, private consumer are increasingly optimistic, especially the willingness to buy and the income expectations are increasing on a rather high level." Germany remained strong throughout the worst of the financial crisis Although there were fears last August it could fall into recession after exports plunged almost 6 percent - the biggest drop in five years. Still - the economy appears to be at least on simmer now. Unemployment is falling and weaker oil prices have help lift wages, outpacing inflation. Turning up the gas on the economy even more than the ECB's new bond-buying programme, according to CMC's Michael Hewson. SOUNDBITE (ENGLISH) CMC MARKETS, CHIEF MARKET ANALYST, MICHAEL HEWSON, SAYING: "I think it's very convenient for economists to suggest that QE has prompted a rebound in economic activity but I would suggest that the lower oil price has had much more of a significant effect and you can see that bore out in the retail sales numbers in the euro zone area that we've seen recently where, particularly in Germany, consumers have become an awful lot more confident about spending money." It's a trend that's on course to continue. Germany's government expects the economy to grow by 1.5 percent this year. And some experts believe it could be even higher. Rolf Buerkl is from GFK (SOUNDBITE) (English) GFK EXPERT ROLF BUERKL SAYING: "Presently, German consumers have an outstanding position compared to their European colleagues. The main reason for this is that unemployment is much lower than compared to the pre-crisis period. In most other countries in Europe we have seen a doubling or even tripling of unemployment during the crisis." The current spate of spending is expected to outlast the weaker oil prices, thanks to low unemployment and higher wages. Germans haven't stopped saving though. Last year they stashed away more than 9 percent of their disposable income. Enough for some to buy a top of the range kitchen - should they want to.

Press CTRL+C (Windows), CMD+C (Mac), or long-press the URL below on your mobile device to copy the code

Confident Germans splash the cash

Monday, March 16, 2015 - 02:25