Consumers - Study: Buying mood in Germany has risen slightly
After a long dry spell, Germans are in a slightly more upbeat buying mood again. According to the consumer climate study published by the consumer research company GfK and the Nuremberg Institute NIM, both income expectations and the propensity to make major purchases recorded noticeable increases at the end of the year.
In their forecast for January, the institutes put the consumer climate at -25.1 points. This represents an increase of 2.5 points compared to the previous month. However, the consumer climate was comparatively stable at around +10 points before the coronavirus pandemic.
NIM expert Bürkl: Consumer concerns remain high
"It remains to be seen whether the current increase is the start of a sustained recovery in consumer sentiment," said NIM expert Rolf Bürkl. "Consumers are still very worried." Geopolitical crises and wars, sharply rising food prices and discussions about the federal budget are causing uncertainty. "As a result, the level of consumer confidence is currently still extremely low," emphasized Bürkl.
Only when solutions to the international crises have been found and measures for greater price stability have been taken will consumption be able to recover in a stable manner. The most important pillar of the slight improvement at the end of the year is income expectations. People can hope for higher wages and salaries. In a survey, a third responded that wage increases that had already taken place or were in prospect led to an optimistic assessment.
In the wake of improved income prospects, the propensity to buy has also increased. In addition, economic pessimism has also eased somewhat. Expectations regarding the economy have risen by 1.9 points compared to the previous month and 10 points compared to the same period last year.
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- Despite the improved buying mood, Rolf Bürkl from the NIM expresses concerns, as consumers remain wary due to geopolitical crises, rising food prices, and budget discussions.
- The current increase in the buying mood might be the beginning of a sustained recovery, according to Bürkl, but consumer confidence remains extremely low due to these uncertainties.
- As the propensity to buy also increases along with improved income expectations, Germans have become more optimistic, with a third reporting that recent or anticipated wage increases positively impacted their assessment.
- Following a robust economic situation preceding the Coronavirus pandemic, Income expectations and the propensity to make major purchases showed noticeable increases at the end of the year, contributing to a slightly more upbeat buying mood in Germany.
- The buoyant buying mood, however, has not translated into substantial consumption yet, as revealed by the latest consumer climate study by GfK and the Nuremberg Institute NIM, putting the consumer climate at -25.1 points in January.
- Amidst the thirsty stretch for a full recovery, high-income households in particular have shown a keen interest in non-essential purchases, indicating a readiness to spend despite the lingering uncertainty brought by the Coronavirus and the global economic situation.
Source: www.stern.de
