Economy: Consumer climate takes a break from recovery

The Germans’ willingness to buy has not improved recently. The recovery in consumer sentiment has taken a break, announced the Nuremberg-based institutes GfK and NIM on the basis of their latest study on the consumer climate in Germany. Both expectations regarding income and economic development have been dampened.

The inclination to make larger purchases has also decreased slightly compared to the previous month. In contrast, the already high propensity to save has increased again slightly. “The interruption of the recently recorded upward trend in the consumer climate shows that the path out of the consumption slump will be difficult and that there can always be setbacks,” said NIM consumer expert Rolf Bürkl.

Increased inflation rate causes uncertainty

The consumer climate has recently risen for four months in a row. In the forecast for July, it now reaches a value of -21.8 points. By comparison, before the corona pandemic, the consumer climate was comparatively stable at a value of around +10 points.

“The slightly higher inflation rate in the country in May is causing more uncertainty among consumers, which is also reflected in the increase in the propensity to save,” stressed Bürkl. “For a sustainable recovery in consumer sentiment, consumers need – in addition to the existing real income growth – planning security, which is particularly necessary for larger household purchases,” he said. The price increase must be curbed and clear future prospects must be shown.

Buying reluctance due to rising prices

“The current reluctance to buy is largely due to rising prices,” the institutes continue. Hopes for a rapid economic recovery have also been clouded. Nevertheless, it can be assumed that the recovery will continue in the second half of the year.

The institutes surveyed consumers between May 30 and June 10, 2000. The interviews were conducted on behalf of the EU Commission.