Poor consumer climate in Germany: People’s desire to buy remains subdued. What is needed for a trend reversal?
The weak economy, price increases and uncertain future prospects are putting pressure on people in Germany’s desire to buy. For November, the Nuremberg market research company GfK, together with the Nuremberg Institute for Market Decisions (NIM), predicts that the consumer climate will fall to minus 28.1 points. Before the corona pandemic and the international crises that followed, the consumer climate in Germany was largely stable at around plus 10 points.
“With the third decline in a row, hopes of a recovery in consumer sentiment this year must finally be buried,” said consumer expert Rolf Bürkl. “Above all, the high prices for food are weakening the purchasing power of private households in Germany and are ensuring that private consumption will not support the economy this year.”
Consumers’ willingness to purchase larger consumer goods has stagnated at a very low level for over a year. The last time the desire to buy was lower was in 2008 during the financial crisis.
In order to reverse the trend in consumption, it is essential that the current decline in price inflation continues. According to the Federal Statistical Office, the inflation rate fell from 6.1 percent in August to 4.5 percent in September. The European Central Bank’s target is around two percent.
Germans’ income prospects would have suffered a further setback. “Income prospects are still in the stranglehold of inflation,” said the experts. Rising food and energy prices eroded household purchasing power and prevented a sustainable recovery.
Source: Stern
