Consumers become more confident as incomes rise
German citizens are slightly more inclined to make larger purchases. However, uncertainty remains high in view of the numerous crises. It is therefore unclear whether the current improvement in sentiment will turn into a lasting upturn.
Consumer sentiment brightens noticeably at the end of the year, but remains at a low level. According to the market research company GfK and the Nuremberg Institute for Market Decisions (NIM), both income expectations and the propensity to buy recorded significant increases. The consumer climate rose to minus 25.1 points in the forecast for January 2024 - an improvement of 2.5 points compared to the previous month.
Consumer concerns remain high. "Geopolitical crises and wars, sharply rising food prices and discussions about the national budget for 2024 continue to cause uncertainty," explained NIM consumer expert Rolf Bürkl. It is therefore unclear whether the current increase is the start of a sustained recovery in consumer sentiment.
Compared to the previous month, income expectations rose by 9.8 points to minus 6.9 points, the highest since July. The researchers cited the expected significant increases in wages, salaries and pensions as the reason for the optimism. The propensity to buy rose noticeably by 6.2 points to minus 8.8 points, while economic expectations improved slightly to minus 0.4 points.
The GfK consumer climate, which has been surveyed regularly since 1974 and monthly since 1980, is considered an important indicator of consumer behavior, which in turn is a key pillar of economic development in Germany. Since October, the data collected by GfK has been evaluated and published jointly with NIM, the founder of GfK.
For the current survey, around 2000 people were questioned from November 30 to December 11. The consumer climate refers to total private consumer spending, i.e. services, travel, rent and health services in addition to retail.
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Despite the improvement in consumer sentiment, the economic situation continues to be influenced by uncertainty due to geopolitical crises, food price hikes, and budget discussions. Despite this, both income expectations and the propensity to buy have seen significant increases, as indicated by the GFK consumer climate, which remains an essential indicator for understanding consumer behavior and economic development in Germany.
In the context of a consumer society, the GFK consumer climate suggests that German citizens are becoming more optimistic about their financial situation, leading to increased expectations for income and a higher propensity to make consumer purchases, even amidst ongoing concerns and challenges.
Source: www.ntv.de
