In spite of a sluggish economy last year, German households were optimistic about their living conditions in Europe's biggest economy, a survey showed on Tuesday.

Market research company GfK said its consumer confidence index for February rose to 5.8, up by 0.1 point from January.

According to the Nuremberg-based company, Germans' income expectations and willingness to buy in January had improved noticeably and the economic outlook was also a little less pessimistic than in the previous month.

The income expectation index rose to 36, much higher than 21.2 in December 2012 and the record level since July last year.

"Despite the current economic slowdown, Germans continue to expect an increase in income over the coming months," GfK said in a statement.

Figures from the German Federal Statistical Office showed that the German economy grew by 0.7 percent in 2012, a much slower pace than in 2011 when it grew by 3 percent.

The labor market in Germany, however, remained stable with 41.6 million Germans employed last year, 1 percent more than a year earlier. Additionally, the German inflation rate remained at 2 percent in 2012, and was expected to continue to be moderate in 2013. This further strengthens people's purchasing power.

GfK's survey based on 2,000 consumer interviews showed that an increasing number of consumers planned to invest in high-value goods soon.

"The present calm in financial markets has caused German consumers to be more confident again at the start of 2013," said GfK.

Its index for consumer expectations for the German economy improved again in January, following a slight drop to minus 17.9 at the end of 2012. Currently, the index stands at minus 11.3 points.

"Despite the economic situation being difficult in Germany in the fourth quarter of 2012, consumers are expecting a gradual revival in the economy over the course of this year," GfK said.

Earlier this month, another two institutes, Munich-based Ifo and Mannheim-based ZEW, released reports showing renewed confidence in the German economy by business and financial market investors.