Just sluggish recovery
Consumer climate is below the level of the first lockdown
05/25/2023 09:54 am
War, inflation, energy worries – the Germans don’t really get into a consumer mood. The index determined by GfK is falling again slightly, overall the level is lower than in the darkest Corona times. Only people’s expectations of their future income give hope.
Consumer sentiment in Germany is recovering only slowly. While the expectations of Germans with regard to their income increased for the eighth time in a row in May, there was a slight drop in both the propensity to buy and economic expectations, according to the Nuremberg-based consumer research company GfK in its latest study on consumer climate.
GfK forecasts minus 24.2 points for the consumer climate in June, which is 1.6 points more than in May of this year. Before the corona pandemic, the consumer climate was relatively constant at around plus 10 points. “Consumer sentiment is currently not showing a clear upward trend. As a result, the rise in consumer confidence has slowed down again,” said GfK consumer expert Rolf Bürkl. “A lower propensity to save has prevented the stalemate in the recovery in consumer confidence this month.”
On the other hand, high cost of living unsettled consumers. In addition, the discussions about the government’s new heating law are causing concerns, especially for property owners. However, consumer sentiment is still below the low level of spring 2020, when the corona lockdown prevailed. The still very low level of the consumer climate indicates that private consumption will not make any significant contribution to the overall economic development in Germany this year. The expected loss of purchasing power would prevent real growth in the domestic economy.
Above all, the expectations of significantly higher, collectively agreed income increases are responsible for the more optimistic mood in terms of income. Many employees assumed that the rise in wages and salaries would at least partially compensate for the price increases. As a result, the loss of purchasing power would be less severe than originally feared.