Consumer confidence improved in July again
Previously, the consumer mood in June had not significantly improved after it had risen for four consecutive months. The brightening in July, according to GfK and NIM, is mainly due to the increased income expectations of the German population. "However, it is likely that the Euro 2024 euphoria, which has been triggered by the Football European Championship in Germany in many parts of the population, also plays a role," explained NIM expert Rolf Bürkl.
It remains to be seen whether this relaxation is sustainable or just a "temporary flare-up." "The high mood emerged as quickly as it did, it could also disappear just as quickly," warned Bürkl.
According to the data, income expectations climbed to their highest level since October 2021 in July. One reason for this was the subdued inflation rate of 2.2 percent, down from 2.4 percent in May. At the same time, wages and pensions have risen, leading to more "income optimism." According to GfK and NIM, a large proportion of German households currently show real income growth.
This led to an increase in purchasing intention. However, the values are still worse than in the two corona lockdowns in the spring of 2020 and at the end of 2020/beginning of 2021, according to the data.
GfK and NIM conduct monthly interviews with consumers. For the current survey, around 2000 people were interviewed from the 4th to the 16th of July. The consumer climate refers to all private consumer expenditures, not just retail, but also services, travel, rent, and healthcare services.
- Rolf Bürkl, an expert from NIM, suggested that the July improvement in consumer mood could be partly influenced by the Euro 2024 excitement, triggered by the upcoming Football European Championship in Germany.
- The July data revealed that consumer income expectations reached their highest level since October 2021, contributing to a rise in income optimism due to subdued inflation and increased wages and pensions.
- GfK and NIM's monthly surveys showed that the consumer climate in Germany improved in July, with a significant proportion of households demonstrating real income growth.
- Despite the improvement, the purchasing intention values in July were still lower than during the two coronavirus lockdowns in 2020, indicating that consumers are still cautious with their spending, despite the positive consumer attitude and income expectations.
