German shoppers are heading into October feeling slightly more optimistic, a key survey showed Thursday, even as the outlook for Europe’s biggest economy remains gloomy.

The forward-looking indicator climbed to minus 21.2 points for October, up 0.7 points on a month earlier, according to pollsters GfK and the Nuremberg Institute for Market Decisions (NIM).

The survey of around 2,000 people showed a “slight increase” in consumer confidence, NIM consumer expert Rolf Buerkl said, adding however that it did not signal “the start of a noticeable recovery”.

“The current mood among consumers is too unstable for that,” he said in a statement.

Geopolitical crises, inflation and growing concerns about job security were all adding to the uncertainty for consumers, Buerkl said.

Nevertheless the survey found that respondents were more upbeat about their income prospects than a month ago, thanks to higher wages and German inflation stabilising at around two percent.

Consumers were also more likely to make large purchases, even if the propensity to buy remains stuck “at a very low level”.

At the same time, respondents said they were more pessimistic than before about the outlook for the German economy.

Hit hard by high energy costs, an industrial downturn and weak demand from key market China, the German economy is struggling to stage a recovery after shrinking in 2023.

Leading economic institutes have downgraded their forecasts in recent weeks, and now expect Germany’s economy to either stagnate this year or slightly contract again.