Wednesday October 27, 2021
Consumer confidence rises despite skepticism
Fear of inflation drives the mood to buy
The consumer climate is still defying rising inflation. Because out of concern that they will pay higher prices later, Germans currently prefer many purchases. In perspective, however, the economic recovery threatens to be delayed.
People in Germany are currently spending money because they are afraid of rising prices. This is the result of the latest study by the Nuremberg-based consumer research company GfK. As a result, the consumer confidence determined by GfK rises to 0.9 points in November. This is the highest value since April 2020, when consumer sentiment rose again after the shock of the first lockdown in the corona pandemic. Before the pandemic, however, the consumer climate had reached values around ten points for months.
The weaker expectations regarding household incomes and the general economy did not affect the current positive mood. Compared to the previous month, there was once again a slight improvement overall.
“The German citizens apparently expect further price increases. That is why they consider it advisable to bring purchases forward in order to avoid even higher prices,” said GfK consumer expert Rolf Bürkl. With the rise in November, “consumer sentiment is defying rising inflation,” said Bürkl. “Should the price increase persist, however, this would lead to a burden on the consumer climate and a fundamental recovery is likely to be delayed further,” he emphasized.
Lack of chips is a cause for concern
While the propensity to buy is currently increasing and the propensity to save is falling, people are also becoming increasingly skeptical about household income and the general economic situation. The latter is mainly due to production losses in the automotive industry, for example. Important raw materials such as computer chips are missing there – in some cases production is only running on the back burner, and employees fear short-time work.
Overall, however, consumer sentiment is still well above the level of the previous year. “The good level shows that consumers remain confident about the recovery of the German economy,” said consumer researcher Bürkl. For the study, the GfK researchers conducted 2000 consumer interviews between September 30 and October 11. The study is part of a long-term study commissioned by the EU Commission.
For its representative studies on the consumer climate, GfK conducts monthly interviews with consumers on their economic expectations, their income expectations and their propensity to buy. For the current survey, around 2000 people were interviewed from September 30th to October 11th. Consumption is an important pillar of economic development in Germany.