Wednesday January 27, 2021
Consumers are holding back
Consumerism collapses in lockdown
The lockdown is noticeable in the GfK consumer climate index: the economic indicator is literally collapsing. During the tough Corona measures, many consumers hesitate to make purchases. GfK may only expect an upward trend after noticeable easing.
Consumer sentiment clouded over significantly in the tough lockdown at the beginning of the year. For February the market research institute GfK forecast a value of minus 15.6 points, 8.1 points less than in January. The consumers' propensity to buy has collapsed, explained the researchers.
"The closure of restaurants and large parts of the retail trade in mid-December 2020 hit the propensity to consume just as hard as the first lockdown in the spring of last year," explained GfK consumer expert Rolf Bürkl. The consumer climate is now facing difficult times in the first quarter. "For a sustained recovery, it is necessary that the number of infections decline more than before so that the measures can be noticeably relaxed," said Bürkl. "That means that the recovery that many have been hoping for this year will be a while in coming."
According to the market researchers, the income prospects of consumers have also fallen, as the lockdown has increased the likelihood that the industries concerned will experience a wave of bankruptcies. This increases the fear of losing their jobs for a number of employees. "In addition, as a result of the hard lockdown, the number of short-time workers is likely to increase again, which also affects household incomes," said the institute.
In contrast, GfK researchers recorded only slight losses in terms of consumer economic expectations. In addition to the overall "stable labor market", they also explained this with the fact that, with the manufacturing sector, a significant part of the German economy is not affected by closure.
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 January 7th to 18th. Consumption is an important pillar of economic development in Germany.
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